2000

Name: TOCAO V. CAG.R. No. 127405; October 4, 2000

Facts: Private respondent Nenita A. Anay met petitioner William T. Belo, then the vice-
president for operations of UltraClean Water Purifier, through her former employer in
Bangkok. Belo introduced Anay to petitioner Marjorie Tocao, who conveyed her desire
to enter into a joint venture with her for the importation and local distribution of kitchen
cookwares. Under the joint venture, Belo acted as capitalist, Tocao as president and
general manager, and Anay as head of the marketing department and later, vice-
president for sales. The parties agreed that Belo's name should not appear in any
documents relating to their transactions with West Bend Company. Anay having
secured the distributorship of cookware products from the West Bend Company and
organized the administrative staff and the sales force, the cookware business took off
successfully. They operated under the name of Geminesse Enterprise, a sole
proprietorship registered in Marjorie Tocao's name. The parties agreed further that
Anay would be entitled to:(1) ten percent (10%) of the annual net profits of the
business;(2) overriding commission of six percent (6%) of the overall weekly
production;(3) thirty percent (30%) of the sales she would make; and (4) two percent
(2%) for her demonstration services. The agreement was not reduced to writing on the
strength of Belo's assurances that he was sincere, dependable and honest when it
came to financial commitments. On October 9, 1987, Anay learned that Marjorie Tocao
had signed a letter addressed to the Cubao sales office to the effect that she was no
longer the vice-president of Geminesse Enterprise. Anay attempted to contact Belo.
She wrote him twice to demand her overriding commission for the period of January
8, 1988to February 5, 1988 and the audit of the company to determine her share in
the net profits. Anay still received her five percent (5%) overriding commission up to
December 1987. The following year, 1988, she did not receive the same commission
although the company netted a gross sales of P 13,300 ,360.00. On April 5, 1988,
Nenita A. Anay filed Civil Case No. 88-509, a complaint for sum of money with
damages against Marjorie D. Tocao and William Belo before the Regional Trial Court
of Makati, Branch 140The trial court held that there was indeed an "oral partnership
agreement between the plaintiff and the defendants. The Court of Appeals affirmed
the lower court’s decision.

Issue: Whether the parties formed a partnership?

Decision: Yes, the parties involved in this case formed a partnership. The Supreme
Court held that to be considered a juridical personality, a partnership must fulfill these
requisites:(1) two or more persons bind themselves to contribute money, property or
industry to a common fund; and (2) intention on the part of the partners to divide the
profits among themselves. It may be constituted in any form; a public instrument is
necessary only where immovable property or real rights are contributed thereto. This
implies that since a contract of partnership is consensual, an oral contract of
partnership is as good as a written one. In the case at hand, Belo acted as capitalist
while Tocao as president and general manager, and Anay as head of the marketing
department and later, vice-president for sales. Furthermore, Anay was entitled to a
percentage of the net profits of the business. Therefore, the parties formed a
partnership.
Name: HEIRS OF TAN ENG KEE vs.CA 341 SCRA 740, G.R. No. 126881, October
3, 2000

Facts: Acer the Second World War, Tan EngKee and Tan Eng Lay, pooling their
resources and industry together, entered into a partnership engaged in the business
of selling lumber and hardware and construction supplies. They named their enterprise
"Benguet Lumber" which they jointly managed un7l Tan EngKee's death. Petitioners
herein averred that the business prospered due to the hard work and thrive of the
alleged partners. However, they claimed that in 1981, Tan Eng Lay and his children
caused the conversion of the partnership "Benguet Lumber" into a corporation called
"Benguet Lumber Company." The incorporation was purportedly a ruse to deprive Tan
EngKee and his heirs of their rightful participation in the profits of the business.
Petitioners prayed for accounting of the partnership assets, and the dissolution,
winding up and liquidation thereof, and the equal division of the net assets of Benguet
Lumber. The RTC ruled in favor of petitioners, declaring that Benguet Lumber is a joint
venture which is akin to a paticular partnership. The Court of Appeals rendered the
assailed decision reversing the judgment of the trial court.

Issue: Whether the deceased Tan EngKee and Tan Eng Lay are joint adventurers
and/or partners in a business venture and/or particular partnership called Benguet
Lumber and as such should share in the profits and/or losses of the business venture
or particular partnership?

Decision: There was no partnership whatsoever. Except for a firm name, there was
no firm account, no firm letterheads submitted as evidence, no certificate of
partnership, no agreement as to profits and losses, and no time fixed for the duration
of the partnership. There was even no attempt to submit an accounting corresponding
to the period acer the war until Kee's death in 1984. It had no business book, no written
account nor any memorandum for that matter and no license mentioning the existence
of a partnership. Also, the trial court determined that Tan EngKee and Tan Eng Lay
had entered into a joint venture, which it said is akin to a particular partnership. A
particular partnership is distinguished from a joint adventure, to wit: (a) A joint
adventure (an American concept similar to our joint accounts) is a sort of informal
partnership, with no firm name and no legal personality. In a joint account, the
participating merchants can transact business under their own name, and can be
individually liable therefor. (b) Usually, but not necessarily a joint adventure is limited
to a SINGLE TRANSACTION, although the business of pursuing to a successful
termination may continue for a number of years; a partnership generally relates to a
continuing business of various transactions of a certain kind. A joint venture
"presupposes generally a parity of standing between the joint co-ventures or partners,
in which each party has an equal proprietary interest in the capital or property
contributed, and where each party exercises equal rights in the conduct of the
business. The evidence presented by petitioners falls short of the quantum of proof
required to establish a partnership. In the absence of evidence, we cannot accept as
an established fact that Tan EngKee allegedly contributed his resources to a common
fund for the purpose of establishing a partnership. Besides, it is indeed odd, if not
unnatural, that despite the forty years the partnership was allegedly in existence, Tan
EngKee never asked for an accounting. The essence of a partnership is that the
partners share in the profits and losses. Each has the right to demand an accounting
as long as the partnership exists. A demand for periodic accounting is evidence of a
partnership. During his lifetime, Tan EngKee appeared never to have made any such
demand for accounting from his brother, Tang Eng Lay. We conclude that Tan EngKee
was only an employee, not a partner since they did not present and offer evidence that
would show that Tan EngKee received amounts of money allegedly representing his
share in the profits of the enterprise. There being no partnership, it follows that there
is no dissolution, winding up or liquidation to speak of.
Name: Santos vs. Reyes (368 SCRA 261) 2000

Facts: In June 1986, Fernando Santos (70%), Nieves Reyes (15%), and Melton Zabat
(15%) orally instituted a partnership with them as partners. Their venture is to set up
a lending business where it was agreed that Santos shall be financier and that Nieves
and Zabat shall contribute their industry. The percentages after their names denote
their share in the profit. Later, Nieves introduced Cesar Gragera to Santos. Gragera
was the chairman of a corporation. It was agreed that the partnershi shall provide loans
to the employees of Gragera’s corporation and Gragera shall earn commission from
loan payments. In August 1986, the three partners put into writing their verbal
agreement to form the partnership. As earlier agreed, Santos shall finance and Nieves
shall do the daily cash flow more particularly from their dealings with Gragera, Zabat
on the other hand shall be a loan investigator. But then later, Nieves and Santos
found out that Zabat was engaged in another lending business which competes
with their partnership hence Zabat was expelled. The two continued with the
partnership and they took with them Nieves’ husband, Arsenio, who became their loan
investigator. Later, Santos accused the spouses of not remitting Gragera’s
commissions to the latter. He sued them for collection of sum of money. The spouses
countered that Santos merely filed the complaint because he did not want the spouses
to get their shares in the profits. Santos argued that the spouses, insofar as the dealing
with Gragera is concerned, are merely his employees. Santos alleged that there is
a distinct partnership between him and Gragera which is separate from the
partnership formed between him, Zabat and Nieves. The trial court as well as the Court
of Appeals ruled against Santos and ordered the latter to pay the shares of the
spouses.

Issue: Whether or not the spouses are partners?

Decision: Yes. Though it is true that the original partnership between Zabat,
Santos and Nieves was terminated when Zabat was expelled, the said
partnership was however considered continued when Nieves and Santos continued
engaging as usual in the lending business even getting Nieves’ husband, who
resigned from the Asian Development Bank, to be their loan investigator – who, in
effect, substituted Zabat. There is no separate partnership between Santos and
Gragera. The latter being merely a commission agent of the partnership. This is
even though the partnership was formalized shortly after Gragera met with Santos
(Note that Nieves was even the one who introduced Gragera to Santos exactly for the
purpose of setting up a lending agreement between the corporation and the
partnership). HOWEVER, the order of the Court of Appeals directing Santos to
give the spouses their shares in the profit is premature. The accounting made by
the trial court is based on the “total income” of the partnership. Such total
income calculated by the trial court did not consider the expenses sustained by
the partnership. All expenses incurred by the money-lending enterprise of the parties
must first be deducted from the “total income” in order to arrive at the “net profit” of the
partnership. The share of each one of them should be based on this “net profit” and
not from the “gross income” or “total income”.
2001

Name: Tocao vs Court of Appeals, 365 SCRA 463 (2001)

Facts: Henry W. Elser was engaged in buying, selling, and administering real estate.
E. S. Lyons joined with him, the profits being shared by the two in equal parts. Lyons,
whose regular vocation was that of a missionary or missionary agent, of the Methodist
Episcopal Church, went on leave to the United States and was gone for nearly a year
and a half. Elser made written statements showing that Lyons was, at that time, half
owner with Elser of three particular pieces of real property. Concurrently with this act
Lyons execute in favor of Elser a general power of attorney empowering him to
manage and dispose of said properties at will and to represent Lyons fully and amply,
to the mutual advantage of both. The attention of Elser was drawn to a piece of land,
referred to as the San Juan Estate. He obtained the loan of P50,000 to complete the
amount needed for the first payment on the San Juan Estate. The lender insisted that
he should procure the signature of the Fidelity & Surety Co. on the note to be given
for said loan. Elser mortgaged to the Fidelity & Surety Co. the equity of redemption in
the property owned by himself and Lyons on Carriedo Street to secure the liability thus
assumed by it. The case for the plaintiff supposes that, when Elser placed a mortgage
for P50,000 upon the equity of redemption in the Carriedo property, Lyons, as half
owner of said property, became, as it were, involuntarily the owner of an undivided
interest in the property acquired partly by that money; and it is insisted for him that, in
consideration of this fact, he is entitled to the four hundred forty-six and two-thirds
shares of J. K. Pickering & Company, with the earnings thereon, as claimed in his
complaint. Private respondent Nenita A. Anay met petitioner William T. Belo, then the
vice-president for operations of Ultra Clean Water Purifier, through her former
employer in Bangkok. Belo introduced Anay to petitioner Marjorie Tocao, who
conveyed her desire to enter into a joint venture with her for the importation and local
distribution of kitchen cookwares Under the joint venture, Belo acted as capitalist,
Tocao as president and general manager, and Anay as head of the marketing
department and later, vice-president for sales The parties agreed that Belo's name
should not appear in any documents relating to their transactions with West Bend
Company. Anay having secured the distributorship of cookware products from the
West Bend Company and organized the administrative staff and the sales force, the
cookware business took off successfully. They operated under the name of
Geminesse Enterprise, a sole proprietorship registered in Marjorie Tocao's name. The
parties agreed further that Anay would be entitled to: (1) ten percent (10%) of the
annual net profits of the business; (2) overriding commission of six percent (6%) of the
overall weekly production; (3) thirty percent (30%) of the sales she would make; and
(4) two percent (2%) for her demonstration services. The agreement was not reduced
to writing on the strength of Belo's assurances that he was sincere, dependable and
honest when it came to financial commitments.

Issue: Whether or not Lyons, as half owner of the Carriedo property, involuntarily
became the owner or a co-partner of an undivided interest in the San On October 9,
1987?

Decision: Under our law, a trust does not necessarily attach with respect to property
acquired by a person who uses money belonging to another. In the case at bar, there
was clearly no general relation of partnership between Lyons and Elser and the most
that can be said is that they had been co-participants in various transactions involving
real estate. It is clear the Elser, in buying the San Juan Estate, was not acting for any
partnership composed for himself and Lyons, especially that the latter expressly
communicated his desire not to participate in this venture. Lastly, it should be noted
that no money belonging to Lyons or any partnership composed by Lyons and Elser
was in fact used by the latter in the purchase of the San Juan Estate Anay attempted
to contact Belo. She wrote him twice to demand her overriding commission for the
period of January 8, 1988 to February 5, 1988 and the audit of the company to
determine her share in the net profits. Anay still received her five percent (5%)
overriding commission up to December 1987. The following year, 1988, she did not
receive the same commission although the company netted a gross sales of P
13,300,360.00. On April 5, 1988, Nenita A. Anay filed Civil Case No. 88-509, a
complaint for sum of money with damages against Marjorie D. Tocao and William Belo
before the Regional Trial Court of Makati, Branch 140 The trial court held that there
was indeed an "oral partnership agreement between the plaintiff and the defendants.
The Court of Appeals affirmed the lower court’s decision.
Name: EMILIO EMNACE, petitioner, vs. COURT OF APPEALS, ESTATE OF
VICENTE TABANAO, SHERWIN TABANAO, VICENTE WILLIAM TABANAO,
JANETTETABANAO DEPOSOY, VICENTA MAY TABANAO VARELA, ROSELA
TABANAO and VINCENT TABANAO, respondents. G.R. No. 126334 November 23,
2001

Facts: Emilio Emnace, Jacinto Divinagracia and Vicente Tabanao formed a

partnership engaged in the fishing industry. In 1986, Jacinto decided to leave the
partnership hence they agreed to dissolve the partnership. At that time, the
partnership has an estimated asset amounting to P30,000,000.00. However, until
the death of Vicente Tabanao in 1994, Emnace never rendered an accounting either
to Vicente or his heirs. Emnace reneged on his promise to turn over Tabanao’s share
which is 1/3 of the P30M. The heirs of Tabanao then sued Emnace. Emnace argued,
among others, that the heirs are barred by prescription hence they can no longer
demand an accounting. He contends that the partnership was dissolved in
1986 and that was the time when Tabanao’s (and his heirs’) right to inquire
into the business affairs accrued; that said right has expired in 1990 or 4
years after. So beyond 1990, they can no longer inquire.

Issue: Whether or not the heirs of Tabano are barred by prescription?

Decision: No. Prescription has not run in this case it has never begun. The three final
stages of partnership are: a) dissolution, b) winding up, and c) termination. In this
case, Emnace and his partners dissolved their partnership but such did not perfect
the dissolution because no accounting took place. The partnership, although
dissolved, continues to exist and its legal personality is retained, at which time it
completes the winding up of its affairs, including the partitioning and distribution of
the net partnership assets to the partners. For as long as the partnership exists,
any of the partners (or legal representative – in this case the heirs of Tabanao) may
demand an accounting of the partnership’s business. Prescription of the said right
starts to run only upon the dissolution of the partnership when the final accounting is
done.
Name: Santos vs Sps. Reyes G.R. No. 135813, October 25, 2001

Facts: Fernando Santos, petitioner, and Nieves Reyes, respondent, was introduced
by each other by one Meliton Zabat regarding a lending business venture proposed
by Nieves. In their “Articles of Agreement” executed by Reyes and Zabat, it was agreed
upon that Santos will act as the financier while Reyes and Zabat would take charge of
solicitation of members and collection of loan payments. Arsenio, Nieves’ husband,
acted as credit investigator. Later on, Zabat was expelled from the partnership
because he was engaged in the same lending business in competition with their
partnership. In 1987, Santos filed a complaint for recovery of sum of money and
damages against the spouses Reyes alleging that, in their capacities as employees,
they had misappropriated funds intended for their client, Gragera. In their answer, the
Spouses Reyes claimed that they were not merely employees but business partners
of Santos. The trial court ruled that the spouses Reyes were not mere employees but
business partners of Santos. On appeal, the CA upheld in toto the trial court’s decision
based on the following circumstances: (1) the lending business was Nieves’ idea and
she was the one who introduced Gragera to Santos; (2) Arsenio received "dividends"
or "profit-shares"; and (3) the partnership contract was executed after the Agreement
with Gragera and Santos and thus showed the parties' intention to consider it as a
transaction of the partnership. In their common venture, Santos invested capital while
spouses Reyes contributed industry or services, with the intention of sharing in the
profits of the business. Hence, this present petition.

Issue: Whether or not the parties' relationship was one of partnership or of employer
employee.

Decision: The SC held that the parties’ relationship is one of partnership. By the
contract of partnership, two or more persons bind themselves to contribute money,
property or industry to a common fund, with the intention of dividing the profits among
themselves. The SC agreed with the lower courts’ decision that spouses Reyes’ were
industrial partners. They provided services without which the partnership would not
have had the wherewithal to carry on the purpose for which it was organized and as
such were considered industrial partners. Further, although Zabat was removed from
the partnership, the remaining partners simply continued the business of the
partnership without undergoing the procedure relative to dissolution. Instead, they
invited Arsenio to participate as a partner in their operations. There was therefore, no
intent to dissolve the earlier partnership. The partnership between Santos, Nieves and
Arsenio simply took over and continued the business of the former partnership with
Zabat.
2002

Name: DOMINION INSURANCE CORPORATION, Petitioner, v. COURT OF

APPEALS, RODOLFO S. GUEVARRA, and FERNANDO AUSTRIA, Respondents. G.
R. No. 129919, February 6, 2002

Facts: Rodolfo Guevarra (Guevarra) filed a civil case for sum of money against
Dominion Insurance Corp. (Dominion) for the amount advanced by Guevarra in his
capacity as manager of defendant to satisfy certain claims filed by defendant’s client.
The pre-trial was always postponed, and during one of the pre-trial conference
dominion failed to arrive therefore the court declared them to be in default. Dominion
filed several Motions to Lift Order of Default but was always denied by the court. The
RTC rendered its decision making Dominion liable to repay Guevarra for the sum
advanced and other damages and fees. Dominion appealed but CA affirmed the
decision of RTC and denied the appeal of Dominion.

Issue: (a) W/N Guevarra acted within his authority as agent of petitioner?
(b) W/N Guevarra must be reimbursed for the amount advanced?

Decision: (a) NO. Even though the contact entered into by Guevarra and Dominion
was with the word “special” the contents of the document was actually a general
agency. A general power permits the agent to do all acts for which the law does not
require a special power and the contents in the document did not require a special
power of attorney.
Art 1878 of the civil code provides instances when a special power of attorney is
required.:
1) To make such payment as are not usually considered as acts of administration.
15) any other act of dominion

The payment of claims is not an act of administration which requires a special power
of attorney before Guevarra could settle the insurance claims of the insured. Also
Guevarra was instructed that the payment for the insured must come from the
revolving fund or collection in his possession, Gueverra should not have paid the
insured through his own capacity. Under 1918 of civil code an agent who acted in
contravention of the principal’s instruction the principal will not be liable for the
expenses incurred by the agent.

(b) YES. Even if the law on agency prohibits Gueverra from obtaining reimbursement
his right to recover may be justified under the article 1236 of the civil code. Thus
Guevarra must be reimbursed but only to the extent that Dominion has benefited
without interest or demand for damages.
Name: VIRGIE SERONA, petitioner, vs. HON. COURT OF APPEALS and THE
PEOPLE OF THE PHILIPPINES, respondents. G.R. No. 130423.November 18, 2002

Facts: Virgie Serano received in trust from Leonida E. Quilatan various pieces of
jewelry in the total value of P567,750.00 to be sold on commission basis under the
express duty and obligation of remitting the proceeds thereof to Quilantan if sold or
returning the same to the latter if unsold.Unknown to Quilatan, Serona entrusted the
jewelry to one Marichu Labrador for the latter to sell on commission basis.Serona was
not able to collect payment from Labrador, which caused her to likewise fail to pay her
obligation to Quilatan.

Issue/s:1. Whether or not THERE WAS AN ABUSE OF CONFIDENCE ON THE

PART OF PETITIONER IN ENTRUSTING THE SUBJECT JEWELRIESTO HER SUB-
AGENT FOR SALE ON COMMISSION TO PROSPECTIVE BUYERS?

Decision: Virgie Serona is ACQUITTEDof the crime of estafa, but is held civilly liable.
An agent who is not prohibited from appointing a sub-agent but does so without
express authority is responsible for the acts of the sub-agent.1. Serano did not ipso
facto commit the crime of estafa through conversion or misappropriation by delivering
the jewelry to a sub-agent for sale on commission basis. The law on agency in our
jurisdiction allows the appointment by an agent of a substitute or sub-agent in the
absence of an express agreement to the contrary between the agent and the principal.
In the case at bar, the appointment of Labrador as petitioners sub-agent was not
expressly prohibited by Quilatan, as the acknowledgment receipt does not contain any
such limitation. Neither does it appear that petitioner was verbally forbidden by
Quilatan from passing on the jewelry to another person before the acknowledgment
receipt was executed or at any other time. Thus, it cannot be said that petitioners act
of entrusting the jewelry to Labrador is characterized by abuse of confidence because
such an act was not proscribed and is, in fact, legally sanctioned.
Name: SIREDY ENTERPRISES, INC.petitioner, vs. HON. COURT OF APPEALS and
CONRADO DE GUZMAN, respondents. G.R. No. 129039.September 17, 2002

Facts: Conrado De Guzman is an architect-contractor doing business under the name

and style of Jigscon Construction. Siredy Enterprises, Inc. (hereafter Siredy) is the
owner and developer of Ysmael Village, a subdivision in Sta. Cruz, Marilao, Bulacan.
The president of Siredy is Ismael E. Yanga.As stated in its Articles of Incorporation,
the primary corporate purpose of Siredy is to acquire lands, subdivide and develop
them, erect buildings and houses thereon, and sell, lease or otherwise dispose of said
properties to interested buyers. Sometime before October 1978, Yanga executed an
undated Letter of Authority duly signed by Yanga which constituted Hermogenes
Santos as Siredys agent, whose authority included entering into a contract for the
building of housing units at Ysmael Village. Thereafter, Santos entered into a Deed of
Agreement with De Guzman. From October 1978 to April 1990, De Guzman
constructed 26 residential units at Ysmael Village. Thirteen (13) of these were fully
paid but the other 13 remained unpaid. The total contractual price of these 13 unpaid
houses is P412,154.93 which was verified and confirmed to be correct by Santos, per
an Accomplishment Billing that the latter signed. Yanga is not a signatory to the said
contact. De Guzman tried but failed to collect the unpaid account from petitioner. Thus,
he instituted the action below for specific performance against Siredy, Yanga, and
Santos who all denied liability. During the trial, Santos disappeared and his
whereabouts remain unknown.

Issue: Whether or not Hermogenes B. Santos was a duly constituted agent of Siredy,
with authority to enter into contracts for the construction of residential units in Ysmael
Village and thus the capacity to bind Siredy to the Deed of Agreement?

Decision: Siredy Enterprises, Inc. is ordered to pay Conrado de Guzman actual

damages with legal interest. Ratio:By the relationship of agency, one party called the
principal authorizes another called the agent to act for and in his behalf in transactions
with third persons. The authority of the agent to act emanates from the powers granted
to him by his principal; his act is the act of the principal if done within the scope of the
authority. He who acts through another acts himself. On its face, the Letter of Authority
executed by Yanga clearly and unequivocally constituted Santos to do and execute,
among other things, the act of negotiating and entering into contract or contracts to
build Housing Units on the subdivision lots in Ysmael Village, Sta. Rosa, Marilao,
Bulacan. Nothing could be more express than the written stipulations contained
therein. It was upon the authority of this document that De Guzman transacted
business with Santos that resulted in the construction contract denominated as the
Deed of Agreement.
2003

Name: VICENTE SY v. CA, GR No. 142293, 2003-02-27

Facts: Sometime in 1958, private respondent Jaime Sahot started working as a truck
helper for petitioners' family-owned trucking business named Vicente Sy Trucking. In
1965, he became a truck driver of the same family business, renamed T. Paulino
Trucking Service, later 6B's Trucking Corporation in 1985, and thereafter known as
SBT Trucking Corporation since1994. Throughout all these changes in names and for
36 years, private respondent continuously served the trucking business of petitioners.
In April 1994, Sahot was already 59 years old. He had been incurring absences as he
was suffering from various ailments. He inquired about his medical and retirement
benefits with the Social Security System (SSS) but discovered that his premium
payments had not been remitted by his employer. Sahot had filed a week-long leave
sometime in May 1994. He was medically examined and treated for EOR, presleyopia,
hypertensive retinopathy HPM, UTI, Osteoarthritis and heart enlargement and On said
grounds SBT Trucking Service management told him to file a formal request for
extension of his leave. Sahot applied for extension of his leave for the whole month of
June, 1994. It was at this time when petitioners allegedly threatened to terminate his
employment should he refuse to go back to work. Sahot found himself in a dilemma.
He was facing dismissal if he refused to work, but he could not retire on pension
because petitioners never paid his correct SSS premiums. They carried out their threat
and dismissed him from work, effective June 30, 1994. He ended up sick, jobless and
penniless. On September 13, 1994, Sahot filed with the NLRC NCR Arbitration
Branch, a complaint for illegal dismissal, he prayed for the recovery of separation pay
and attorney’s fees against herein petitioners. Or their part, petitioners admitted they
had a trucking business in the 1950s but denied employing helpers and drivers. They
contend that private respondent was not illegally dismissed as a driver because he
was in fact petitioner's industrial partner. The NLRC NCR Arbitration Branch, through
Labor Arbiter Ariel Cadiente Santos, ruled that there was no illegal dismissal in Sahot's
case. On appeal, the National Labor Relations Commission modified the judgment of
the Labor Arbiter. It declared that private respondent was an employee, not an
industrial partner, since the start. Private respondent Sahot did not abandon his job
but his employment was terminated on account of his illness, pursuant to Article 284.
Petitioners assailed the decision of the NLRC before the Court of Appeals. The
appellate court affirmed with modification the judgment of the NLRC. It held that private
respondent was indeed an employee of petitioners since 1958.Hence, the instant
petition

Issue: Whether or not an employer-employee relationship existed between petitioners

and respondent Sahot?

Decision: Article 1767[21] of the Civil Code states that in a contract of partnership two
or more persons bind themselves to contribute money, property or industry to a
common fund, with the intention of dividing the profits among themselves. Not one of
these circumstances is present in this case. No written agreement exists to prove the
partnership between the parties. Private respondent did not contribute money,
property or industry for the purpose of engaging in the supposed business. There is
no... Proof that he was receiving a share in the profits as a matter of course, during
the period when the trucking business was under operation. Neither is there any proof
that he had actively participated in the management, administration and adoption of
policies of the business. Thus, the NLRC and the CA did not err in reversing the finding
of the Labor Arbiter that private respondent was an industrial partner from 1958 to
1994.
Name: LUZVIMINDA J. VILLAREAL, DIOGENES VILLAREAL and CARMELITO
JOSE, petitioners, vs. DONALDO EFREN C. RAMIREZ and Spouses CESAR G.
RAMIREZ JR. and CARMELITA C. RAMIREZ, respondents. G.R. No. 144214 July 14,
2003

Facts: A share in a partnership can be returned only after the completion of the latter's
dissolution, liquidation and winding up of the business. In 1984, Villareal, Carmelito
Jose and Jesus Jose, formed a partnership for the purpose of operating a restaurant.
Each contributed P250,000.00. In 1984, Ramirez was added as a partner after he
contributed P250,000.00. In 1987, Jesus withdrew from the partnership and his capital
share of P250k was returned to him as agreed upon by the other partners. Thereafter,
the restaurant suffered losses. Without informing Ramirez, Villareal and Carmelito shut
down the restaurant. They then turned over the restaurant equipments to Ramirez.
Later, Ramirez sent a letter to Villareal and Carmelito telling them he’s no longer
interested in being a partner and that he’s demanding his shares in the partnership.
Villareal and Carmelito ignored the request of Ramirez hence the latter sued them. In
their defense, Villareal and Carmelito said that the restaurant equipments served as
payment to Ramirez when they were delivered to them; that Ramirez cannot ask for
share in equity because the restaurant incurred debts (P240,658.00) and irreversible
business losses. Ramirez argued by saying that the equipments were merely placed
in their house for storage as the two partners allegedly searched for a better restaurant
location; that he was not aware of any losses or any indebtedness because he never
took part in the management of the restaurant. The trial court ruled in favor of Ramirez.
The Court of Appeals affirmed the trial court and it further ordered Villareal and
Carmelito to pay Ramirez P253,114.00. The computation was done as follows:
(Original Partnership Capital – Partnership Debt = Partnership Asset) ÷ Number of
partners; hence: (P1,000,000.00 – P240,658.00 = P759,342.00) ÷ 3 = P253,114.00.

Issue: Whether or not the Court of Appeals is correct?

Decision: No. It is impossible that the said P1,000,000.00 original capital did not
fluctuate. It could not have remained stagnant. Further, the Court of Appeals missed
to note that one partner left and his contribution was returned (Jesus Jose). Generally,
in the pursuit of a partnership business, its capital is either increased by profits earned
or decreased by losses sustained. It does not remain static and unaffected by the
changing fortunes of the business.
Name: PURITA PAHUD, SOLEDAD PAHUD, and IAN LEE CASTILLA(represented
by Mother and Attorney-in-Fact VIRGINIACASTILLA), Petitioners, vs. COURT
OF APPEALS et. al., Respondents. G.R. No. 160346 (2003)

Facts: During their lifetime, spouses Pedro San Agustin and Agatona Genilwere able
to acquire a 246-square meter parcel of land situated in Barangay Anos, Los
Baos, Laguna and covered by Original Certificate of Title (OCT) No. O-(1655) 0-
15. Agatona Genil died on September 13, 1990 while Pedro San Agustin died on
September 14,1991. Both died intestate, survived by their eight (8) children:
respondents Eufemia, Raul, Ferdinand, Zenaida, Milagros, Minerva, Isabelita and
Virgilio. Sometime in 1992, Eufemia, Ferdinand and Raul executed a Deed of Absolute
Sale of Undivided Shares conveying in favor of petitioners (the Pahuds, for brevity)
their respective shares from the lot they inherited from their deceased parents for
P525,000.00. Eufemia also signed the deed on behalf of her four (4) other co-
heirs, namely: Isabelita on the basis of a special power of attorney executed on
September 28, 1991, and also for Milagros, Minerva, and Zenaida but without their
apparent written authority. The deed of sale was also not notarized. On July 21, 1992,
the Pahuds paid P35,792.31 to the Los Baos Rural Bank where the subject property
was mortgaged. The bank issued a release of mortgage and turned over the owners
copy of the OCT to the Pahuds. Over the following months, the Pahuds made more
payments to Eufemia and her siblings totaling to P350,000.00. They agreed
to use the remaining P87,500.00 to defray the payment for taxes and the expenses
in transferring the title of the property. When Eufemia and her co-heirs drafted an
extra-judicial settlement of estate to facilitate the transfer of the title to the Pahuds,
Virgilio refused to sign it. On July 8, 1993, Virgilios co-heirs filed a complaint
for judicial partition of the subject property before the RTC of Calamba
Laguna. On November 28, 1994, in the course of the proceedings for judicial partition,
a Compromise Agreement was signed with seven (7) of the co-heirs agreeing to sell
their undivided shares to Virgilio for P700,000.00. The compromise agreement was,
however, not approved by the trial court because Atty. Dimetrio Hilbero, lawyer for
Eufemia and her six (6) co-heirs, refused to sign the agreement because he knew
of the previous sale made to the Pahuds. On December 1, 1994, Eufemia
acknowledged having received P700,000.00 from Virgilio. Virgilio then sold
the entire property to spouses Isagani Belarmino and Leticia Ocampo
(Belarminos) sometime in 1994. The Belarminos immediately constructed a
building on the subject property. Alarmed and bewildered by the ongoing construction
on the lot they purchased, the Pahuds immediately confronted Eufemia who
confirmed to them that Virgilio had sold the property to the Belarminos.
Aggrieved, the Pahuds filed a complaint in intervention in the pending case for judicial
partition. After trial, the RTC upheld the validity of the sale to petitioners. The
dispositive portion of the decision reads: Not satisfied, respondents appealed the
decision to the CA arguing, in the main, that the sale made by Eufemia for and on
behalf of her other co-heirs to the Pahuds should have been declared void and
inexistent for want of a written authority from her co-heirs. The CA yielded and set
aside the findings of the trial court. In disposing the issue, the CA ruled: Judicial
Partition is hereby REVERSED and SET ASIDE, and a new one entered.

Issue: The focal issue to be resolved is the status of the sale of the subject property
by Eufemia and her co-heirs to the Pahuds?
Decision: We find the transaction to be valid and enforceable. Also, under Article
1878, a special power of attorney is necessary for an agent to enter into a contract
by which the ownership of an immovable property is transmitted or acquired,
either gratuitously or for a valuable consideration. In several cases, we have
repeatedly held that the absence of a written authority to sell a piece of land is, ipso
jure, void, precisely to protect the interest of an unsuspecting owner from being
prejudiced by the unwarranted act of another. Based on the foregoing, it is not
difficult to conclude, in principle, that the sale made by Eufemia, Isabelita
and her two brothers to the Pahuds sometime in 1992 should be valid only with
respect to the 4/8 portion of the subject property. The sale with respect
to the 3/8 portion, representing the shares of Zenaida, Milagros, and Minerva,
is void because Eufemia could not dispose of the interest of her co-heirs in the said
lot absent any written authority from the latter, as explicitly required by law. This was,
in fact, the ruling of the CA. Still, in their petition, the Pahuds argue that the
sale with respect to the 3/8 portion of the land should have been deemed
ratified when the three co-heirs, namely: Milagros, Minerva, and Zenaida,
executed their respective special power of attorneys authorizing Eufemia to
represent them in the sale of their shares in the subject property. While the sale
with respect to the 3/8 portion is void by express provision of law and not
susceptible to ratification, we nevertheless uphold its validity on the basis of
the common law principle of estoppel. Article 1431 of the Civil Code provides:
Art. 1431. Through estoppel an admission or representation is rendered
conclusive upon the person making it, and cannot be denied or disproved as against
the person relying thereon. True, at the time of the sale to the Pahuds, Eufemia was
not armed with the requisite special power of attorney to dispose of the 3/8 portion
of the property. It is a basic rule in the law of agency that a principal is subject to
liability for loss caused to another by the latters reliance upon a deceitful
representation by an agent in the course of his employment (1) if the representation is
authorized; (2) if it is within the implied authority of the agent to make for the principal;
or (3) if itis apparently authorized, regardless of whether the agent was
authorized by him or not to make the representation. By their continued silence,
Zenaida, Milagros and Minerva have caused the Pahuds to believe that they have
indeed clothed Eufemia with the authority to transact on their behalf. Clearly, the three
co-heirs are now estopped from impugning the validity of the sale from assailing the
authority of Eufemia to enter into such transaction. Accordingly, the subsequent sale
made by the seven co-heirs to Virgilio was void because they no longer had any
interest over the subject property which they could alienate at the time of the second
transaction.
2004

Name: MANILA MEMORIAL PARK CEMETERY, INC., petitioner, vs. PEDRO L.

LINSANGAN, respondent. G.R. No. 151319 November 22, 2004

Facts: Florencia Baluyot offered Atty. Pedro L. Linsangan a lot called Garden State at
the Holy Cross Memorial Park owned by petitioner (MMPCI). According to Baluyot, a
former owner of a memorial lot under Contract No. 25012 was no longer interested in
acquiring the lot and had opted to sell his rights subject to reimbursement of the
amounts he already paid. The contract was for P95,000.00. Baluyot reassured Atty.
Linsangan that once reimbursement is made to the former buyer, the contract would
be transferred to him. Atty. Linsangan agreed and gave Baluyot P35,295.00
representing the amount to be reimbursed to the original buyer and to complete the
down payment to MMPCI. Baluyot issued handwritten and typewritten receipts for
these payments. Baluyot verbally advised Atty. Linsangan that Contract No. 28660
was cancelled for reasons the latter could not explain, and presented to him another
proposal for the purchase of an equivalent property. He refused the new proposal and
insisted that Baluyot and MMPCI honor their undertaking. For the alleged failure of
MMPCI and Baluyot to conform to their agreement, Atty. Linsangan filed a Complaint
for Breach of Contract and Damages against the former. For its part, MMPCI alleged
that Contract No. 28660 was cancelled conformably with the terms of the contract
because of non-payment of arrearages. MMPCI stated that Baluyot was not an agent
but an independent contractor, and as such was not authorized to represent MMPCI
or to use its name except as to the extent expressly stated in the Agency Manager
Agreement.

Issue: Whether or not a contract of agency exists between Baluyot and MMPCI?

Decision: NO. The acts of an agent beyond the scope of his authority do not bind the
principal, unless he ratifies them, expressly or impliedly. Only the principal can ratify;
the agent cannot ratify his own unauthorized acts. Moreover, the principal must have
knowledge of the acts he is to ratify. No ratification can be implied in the instant case.
Atty. Linsangan failed to show that MMPCI had knowledge of the arrangement. As far
as MMPCI is concerned, the contract price was P132,250.00, as stated in the Offer to
Purchase signed by Atty. Linsangan and MMPCI's authorized officer. Likewise, this
Court does not find favor in the Court of Appeals' findings that "the authority of
defendant Baluyot may not have been expressly conferred upon her; however, the
same may have been derived impliedly by habit or custom which may have been an
accepted practice in their company in a long period of time." A perusal of the records
of the case fails to show any indication that there was such a habit or custom in MMPCI
that allows its agents to enter into agreements for lower prices of its interment spaces,
nor to assume a portion of the purchase price of the interment spaces sold at such
lower price. No evidence was ever presented to this effect.
Name: FELOMINA ABELLANA, petitioner, vs. SPOUSES ROMEO PONCE and
LUCILA PONCE and the REGISTER OF DEEDS of BUTUAN CITY, respondents.
G.R. No. 160488 September 3, 2004

Facts: On July 15, 1981, Felomina, a spinster, pharmacist and aunt of private
respondent Lucila Ponce, purchased from the late Estela Caldoza-Pacres a
44,297 square meter agricultural lot with the intention of giving said lot to her
niece, Lucila. Thus, in the deed of sale, the latter was designated as the buyer of Lot
3, Pcs-10-000198, covered by Original Certificate of Title No. P-27, Homestead
PatentNo. V-1551 and located at Los Angeles, Butuan City. The total
consideration of the sale was P16,500.00, but only P4,500.00 was stated in the
deed upon the request of the seller. Subsequently, Felomina applied for the
issuance of title in the name of her niece. On April 28, 1992, Transfer Certificate of
Title (TCT) No. 2874 over the subject lot was issued in the name of Lucila. Said
title, however, remained in the possession of Felomina who developed the
lot through Juanario Torreon and paid real property taxes thereon. The relationship
between Felomina and respondent spouses Romeo and Lucila Ponce, however,
turned sour. The latter allegedly became disrespectful and ungrateful to the point of
hurling her insults and even attempting to hurt her physically. Hence, Felomina filed
the instant case for revocation of implied trust to recover legal title over the property.
Private respondent spouses Lucila, also a pharmacist, and Romeo, a marine engineer,
on the other hand, claimed that the purchase price of the lot was only P4,500.00 and
that it was them who paid the same. The payment and signing of the deed of sale
allegedly took place in the office of Atty. Teodoro Emboy in the presence
of the seller and her siblings namely, Aquilino Caldoza and the late Lilia Caldoza. A
year later, Juanario approached Lucila and volunteered to till the lot, to which she
agreed. In 1987, the spouses consented to Felomina’s proposal to develop and lease
the lot. They, however, shouldered the real property taxes on the lot, which was paid
through Felomina. When Lucila learned that a certificate of title in her name had
already been issued, she confronted Felomina who claimed that she already gave her
the title. Thinking that she might have misplaced the title, Lucila executed an affidavit
of loss which led to the issuance of another certificate of title in her name.

Issue: Is there an implied trust created between the parties?

Decision: Yes, While Felomina sought to recover the litigated lot on the ground of
implied trust and not on the invalidity of donation, the Court is clothed with ample
authority to address the latter issue in order to arrive at a just decision that completely
disposes of the controversy. Since rules of procedure are mere tools designed to
facilitate the attainment of justice, they must be applied in a way that equitably and
completely resolve the rights and obligations of the parties. Finally, in deciding in favor
of Felomina, the trial court ordered respondent spouses to execute a deed of sale over
the subject lot in favor of Felomina in order to effect the transfer of title to the latter.
The proper remedy, however, is provided under Section 10 (a), Rule39 of the Revised
Rules of Civil Procedure which provides that " if real or personal property is situated
within the Philippines, the court in lieu of directing a conveyance thereof may by an
order divest the title of any party and vest it in others, which shall have the force and
effect of a conveyance executed in due form of law."
Name: LIM v. SABAN, G.R. No. 163720; December 16, 2004

Facts: Under an Agency Agreement, Ybañez authorized Saban to look for a buyer of
the lot for Two Hundred Thousand Pesos (P200,000.00) and to mark up the selling
price to include the amounts needed for payment of taxes, transfer of title and other
expenses incident to the sale, as well as Saban's commission for the sale. Through
Saban's efforts, Ybañez and his wife were able to sell the lot to the petitioner
Genevieve Lim (Lim) and the spouses Benjamin and Lourdes Lim (the Spouses Lim)
on March 10, 1994. The price of the lot as indicated in the Deed of Absolute Sale is
Two Hundred Thousand Pesos (P200,000.00). It appears, however, that the vendees
agreed to purchase the lot at the price of Six Hundred Thousand Pesos (P600,000.00),
inclusive of taxes and other incidental expenses of the sale. After the sale, Lim remitted
to Saban the amounts of P113,257 for payment of taxes due on the transaction as well
as P50,000.00 as broker's commission. Lim also issued in the name of Saban four
postdated checks in the aggregate amount of P236,743.00. Subsequently, Ybañez
sent a letter dated June 10, 1994 addressed to Lim. In the letter Ybañez asked Lim to
cancel all the checks issued by her in Saban's favor and to "extend another partial
payment" for the lot in his (Ybañez's) favor. After the four checks in his favor were
dishonored upon presentment, Saban filed a complaint for collection of sum of money
and damages against Ybañez and Lim Saban alleged that Ybañez told Lim that he
(Saban) was not entitled to any commission for the sale since he concealed the actual
selling price of the lot from Ybañez and because he was not a licensed real estate
broker. Ybañez was able to convince Lim to cancel all four checks. In his Answer,
Ybañez claimed that Saban was not entitled to any commission because he concealed
the actual selling price from him and because he was not a licensed real estate broker.

Issue: Whether Saban is entitled to receive his commission from the sale?

Decision: Yes, Saban is entitled to receive his commission from the sale. The
Supreme Court held that to deprive Saban of his commission subsequent to the sale
which was consummated through his efforts would be a breach of his contract of
agency with Ybañez which expressly states that Saban would be entitled to any
excess in the purchase price after deducting the P200,000.00 due to Ybañez and the
transfer taxes and other incidental expenses of the sale. Moreover, the Court has
already decided in earlier cases that would be in the height of injustice to permit the
principal to terminate the contract of agency to the prejudice of the broker when he
had already reaped the benefits of the broker's efforts.
2005

Name: MEDRANO and IBAAN RURAL BANK vs. COURT OF APPEALS G.R. No.
150678 February 18, 2005

Facts: Bienvenido Medrano was the Vice-Chairman of Ibaan Rural Bank. He asked
Flor (a cousin), to look for a buyer of a foreclosed asset of the bank (17-hectare mango
plantation with 720 trees priced at P2.2M). Dominador Lee, a Makati businessman
was a client of respondent Pacita Borbon, a licensed real estate broker. Borbon
relayed to her business associates and friends that she had a ready buyer for a mango
orchard. Flor then advised her that her cousin-in-law owned a mango plantation which
was up for sale. She told Flor to confer with Medrano and to give them a written
authority to negotiate the sale of the property. Medrano issued the Letter of Authority
to Borbon and Antonio to negotiate with any prospective buyer for the sale of the
mango plantation. He promised Borbon to pay a commission of 5% of the total
purchase price to be agreed upon by the buyer and seller. An ocular inspection was
held by Lee. Lee informed Antonio that he already purchased the property and had
made a down payment ofP1M. The remaining balance of P1.2M was to be paid upon
the approval of the incorporation papers of the corporation he was organizing by the
SEC. According to Antonio, Lee asked her if they had already received their
commission. She answered “no,” and Lee expressed surprise over this. Since the sale
of the property was consummated, the respondents asked from the petitioners their
commission, or 5% of the purchase price. The petitioners refused to pay and offered
a measly sum of P5,000.00 each. Hence, the present action. Medrano’s defense:
Borbon and Antonio did not perform any act to consummate the sale. The petitioners
pointed out that the respondents (1) did not verify the real owner of the property; (2)
never saw the property in question; (3) never got in touch with the registered owner of
the property; and (4) neither did they perform any act of assisting their buyer in having
the property inspected and verified.

Issue: Whether or not the plaintiffs are entitled to any commission for the sale of the
subject property?

Decision: Yes. The respondents are indeed the procuring cause of the sale. If not for
the respondents, Lee would not have known about the mango plantation being sold
by the petitioners. The sale was consummated. The bank had profited from such
transaction. It would certainly be iniquitous if the respondents would not be rewarded
their commission pursuant to the letter of authority. “Procuring cause” = the proximate
cause. The term “procuring cause,” in describing a broker’s activity, refers to a cause
originating a series of events which, without break in their continuity, result in
accomplishment of prime objective of the employment of the broker – producing a
purchaser ready, willing and able to buy real estate on the owner’s terms. The
evidence on record shows that the respondents were instrumental in the sale of the
property to Lee. Without their intervention, no sale could have been consummated.
They were the ones who set the sale of the subject land in motion. While the letter-
authority issued in favor of the respondents was non-exclusive, no evidence was
adduced to show that there were other persons, aside from the respondents, who
informed Lee about the property for sale. When there is a close, proximate and causal
connection between the broker’s efforts and the principal’s sale of his property, the
broker is entitled to a commission. In the absence of fraud, irregularity or illegality in
its execution, such letter authority serves as a contract, and is considered as the law
between the parties. The clear intention is to reward the respondents for procuring a
buyer for the property.
Name: MARIA TUAZON, ALEJANDRO P. TUAZON, MELECIO P. TUAZON, Spouses
ANASTACIO and MARY T. BUENAVENTURA vs. HEIRS OF BARTOLOME
RAMOSG.R. No. 156262 July 14, 2005

Facts: The case involves the collection of a sum of money which arose from the
bouncing check issued by one Evangeline Santos, indorsed by the spouses Leonilo
and Maria Tuazon in payment of the remaining unpaid 3,889 cavans amounting to
P1,211,919.00. Despite demand from the heirs of Ramos, spouses Tuazon failed to
pay and instead claimed that they are merely acting as agents and should not be held
liable. Further, spouses Tuazon instituted a civil case against Evangeline Santos for
collection of the amounts represented by the unfunded checks, in a separate civil case
which they now sought to be consolidated with the instant case.

Issue: Whether or not the spouses Tuazon are agents of Ramos?

Decision: No. The declarations of agents alone are generally insufficient to establish
the fact or extent of their authority.13 The law makes no presumption of agency;
proving its existence, nature and extent is incumbent upon the person alleging it. In
the present case, petitioners raise the fact of agency as an affirmative defense, yet fail
to prove its existence. Spouses Tuazon, on their own behalf, sued Evangeline Santos
for collection of the amounts represented by the bounced checks, in a separate civil
case that they sought to be consolidated with the current one. If, as they claim, they
were mere agents of respondents, petitioners should have brought the suit against
Santos for and on behalf of their alleged principal, in accordance with Section 2 of
Rule 3 of the Rules on Civil Procedure. Their filing a suit against her in their own names
negates their claim that they acted as mere agents in selling the rice obtained from
Bartolome Ramos.
Name: CARLOS SANCHEZ vs. MEDICARD PHILIPPINES, INC., DR. NICANOR
MONTOYA and CARLOS EJERCITOG.R. No. 141525 September 2, 2005

Facts: Medicard Philippines, Inc. (Medicard) appointed Carlos Sanches as its special
corporate agent. As such agent, Medicard gave him a 18% commission based on
"cash brought in." Through Sanchez' efforts, Medicard and United Laboratories Group
of Companies (Unilab) executed a Health Care Program Contract which was renewed
for another year, in both instances, Medicard paid Sanchez his commissions. On the
third year, Unilab rejected Medicard's proposal "for the reason that it was too high,"
prompting the Administrators of Medicard to request for the reduction of Sanchez's
commission which he refused.Meanwhile, in order not to prejudice its personnel by the
termination of their health insurance, Unilab, through Medicard's administrators
negotiated a new scheme acceptable by both parties involved. Medicard did not give
petitioner any commission under the new scheme.
Issue: Whether or not Sanchez is entitled to a commission under the new scheme as
Medicard's appointed special corporate agent?

Decision: No. Since petitioner refused to reduce his commission, prompting Medicard
to directly negotiate with Unilab, in turn revoked its agency contract with Sanchez,
such revocation is authorized by Article 1924 of the Civil Code which provides: "The
agency is revoked if the principal directly manages the business entrusted to the
agent, dealing directly with third persons.
2006

Name: ABERTO HERBON, MARGARITO HERBON and GABINOHERBON,

petitioners, vs. LEOPOLDO T. PALAD and HELENP. CAYETANO, respondents, G.R.
No. 149542, July 20, 2006

Facts: Gonzalo Palad in his lifetime was a co-owner of a parcel of agricultural land
located in Poblacion, Bagac, Bataan known as Lot 421, with an area of 32,944 square
meters and covered by Transfer Certificate of Title (TCT) No. 4408 of the Register
of Deeds of Bataan. Gonzalo’s share was conjugal property, having been
acquired during his marriage with Alejandra Nava. Alejandra died in1949,
Gonzalo contracted a second marriage with Remedios Torres, a widow with
three children from her previous marriage, herein petitioners. The union of
Gonzalo and Remedios bore no children. On November 16, 1983, Gonzalo
died. Thereafter, petitioners took possession of a portion of the property and despite
respondents’ demand to vacate and turnover possession of the property,
petitioners refused to do so. On July 22, 1997, the RTC rendered its Decision
dismissing the complaint and ordering respondents to pay petitioners P 3,000.00 as
attorney’s fees and cost of suit. The RTC held that the action for recovery of
possession cannot prosper since petitioners proved that they are co-owners of the
subject property based on the two deeds of absolute sale while CA set aside the
decision of RTC. Hence, an appeal.

Issue: Whether or not implied trust exist in this case?

Decision: Yes, the Court finds that on matters of implied trust, Article1448 of the
Civil Code provides: “There is an implied trust when property is sold\, and the
legal estate is granted to one party but the price is paid by another for the
purpose of having the beneficial interest of the property. The former is the trustee,
while the latter is the beneficiary. However, if the person whom the title is conveyed is
a child, legitimate or illegitimate, of the one paying the price of the sale, no trust is
implied by law, it being disputably presumed that there is a gift in favor of the child.”
The trust created is sometimes referred to as a purchase money resulting
trust, the elements of which are: a) an actual payment of money, property or services,
or an equivalent, constituting valuable consideration; and b) such consideration
must be furnished by the alleged beneficiary of a resulting trust.
Name: Spouses ANTHONY and PERCITA OCO, Petitioners, vs. VICTOR
LIMBARING, Respondent.G.R. No. 161298, January 31, 2006

Facts: Sometime in 1996, Sabas Limbaring subdivided his Lot 2325-D, covered by
Transfer Certificate of Title (TCT) No. 5268, into two lots denominated as Lot Nos.
2325-D-1 and 2325-D-2. He then executed in favor of Jennifer Limbaring a Deed of
Sale for Lot 2325-D-2 forP60,000; and, in favor of Sarah Jane Limbaring, another
Deed for Lot2325-D-1 for P14,440. Accordingly, TCT No. 5268 was cancelled and
TCT Nos. T-21921 and T-21920 were issued in the names of Jennifer and Sarah Jane,
respectively. Sensing some irregularities in the transaction, Percita Oco, the daughter
of Sabas Limbaring, left Puerto Princesa City and went to Ozamis City. She then
filed a case of perjury and falsification of documents against respondent,
her uncle who was the father of Jennifer and Sarah Jane. During the pre-
litigation conference called by City Prosecutor Luzminda Uy on July 1, 1996, the
parties agreed that the two parcels of land should be reconveyed to Percita, who was
to pay respondent all the expenses that had been and would be incurred to transfer
the titles to her name.

Issue: Was there a trust created between Limbaring when he purchased the
properties in favor of his daughter?

Decision: No, under the last sentence of Article 1448, respondent’s alleged
acts paying the price of the subject properties and, in the titles, naming his children
as owners -- raise the presumption that a gift was effected in their favor.
Respondent failed to rebut this presumption. Absent any clear proof that a
trust was created, he cannot be deemed a real party in interest. That he
should be deemed a trustor on the basis merely of having paid the purchase price is
plainly contradicted by the presumption based on Article 1448of the Civil Code "that
there is a gift in favor of the child," not with parent.
Name: MARLENE CRISOSTOMO & JOSE G. CRISOSTOMO, Petitioners, vs.
FLORITO M. GARCIA, JR., Respondent. G.R. No. 164787 January 31, 2006

Facts: On 24 September 1986, Victoria Garcia Vda. de Crisostomo, mother of

petitioner Jose G. Crisostomo, sold to him, by way of a Deed of Absolute Sale, the
property, described in the aforesaid TCT including the improvements and rights
thereon, particularly described as TAG No. 84-205-1097 (Urban Bliss Level I located
at 163 Libis Talisay, Caloocan City). In the Deed of Sale, petitioner Jose
Crisostomo and his sister Cristina Crisostomo signed as witnesses in the execution of
the instrument. Since they were distant relatives, respondent allowed Victoria and
her children, petitioner Jose and Cristina, to stay in the subject property as lessees
under a Contract of Lease. By virtue of the said deed of sale, respondent effected the
transfer of the tax declaration covering the property, under his name from the City
Assessor’s Office of Caloocan City. However, before the transfer of title to
respondent could be completed, petitioners-spouses Jose and Marlene Crisostomo
were able to secure a loan from the National Home Mortgage Finance
Corporation using the subject property as security through bad faith and
machinations. Worse, petitioners were able to transfer the subject property
under their names, obtaining TCT No. 273165, from the Registry of Deeds of Caloocan
City, without the knowledge and consent of the respondent. Instead of an Answer,
petitioners filed an "Urgent Motion to Dismiss Action," alleging that since respondent’s
cause of action is based on an alleged deed of sale executed on 24September 1986,
the cause of action of the respondent to enforce and to implement the instrument arose
on 24 September 1986 and pursuant to Article 11446 of the Civil Code, the
action must be brought within 10 years from the time the right of action accrues.
Thus, from 24 September 1986, respondent had only up to 24 September
1996 within which to file the action. Since the complaint was filed only on 20 June
2002, or after the lapse of more than 16years, the cause of action is clearly barred by
prescription.

Issue: Whether or not the action filed by the respondent had already prescribed?

Decision: No, it is now well-settled that the prescriptive period to recover property
obtained by fraud or mistake, giving rise to an implied trust under Art. 1456 of the Civil
Code, is 10 years pursuant to Art. 1144.This ten-year prescriptive period begins
to run from the date the adverse party repudiates the implied trust, which
repudiation takes place when the adverse party registers the land. Clearly, the
applicable prescriptive period is ten years under Art. 1144 and not four years under
Arts. 1389 and 1391. Applying the law and jurisprudential declaration above-cited to
the allegations of fact in the complaint, it can clearly be seen that respondent has a
period of 10 years from the registration of the title within which to file the action. Since
the title was registered in the name of the petitioner son 16 November 1993,
respondent had a period of 10 years from the time of the registration within which to
file the complaint. Since the complaint was filed on 20 June 2002, the action
clearly has not prescribed and was timely-filed.
2007

Name: Eurotech Industrial Inc v. Cuizon and Cuizon GR. 167552 April 23, 2007

Facts: Petitioner is engaged in business of importation and distribution of various

European industrial equipment for customers in the Philippines. One of its customers
Impact System Sales owned by respondent Erwin Cuizon and its sales manager is
respondent Edwin Cuizon. Petitioner sold to Impact Systems a sludge pump but
refused to deliver the same because respondents did not fully settle their indebtedness
to petitioner. On June 1995, respondent Edwin and petitioner executed a Deed of
Assignment wherein respondent assigned receivables to petitioner for the delivery of
the sludge pump. Unknown to the petitioner, respondent still collected the receivables
despite the Assignment. Petitioner filed an action against the respondents.

Issue: Whether or not Edwin Cuizon is personally liable in the indebtedness of the
company?

Decision: No. Ratio: Article 1897 provides that an agent who acts as such is not
personally liable to party with whom he contracts except when (1) he expressly binds
himself to the obligation and (2) when he exceeded his authority. The Deed of
Assignment clearly states that respondent Edwin Cuizon signed as the sales manager
of Impact Systems
Name: Mercado v Allied Banking G.R. No. 171460, July 27, 2007

Facts: Julian Mercado was given a Special Power of Attorney authorizing him to
perform the acts to sell, alienate, mortgage, lease and deal on the properties of his
wife Perla enumerated in the said document. However, the heirs of Perla are seeking
the declaration of the real estate mortgage constituted on TCT No. RT-18206 (106338)
entered into by Julian and the Allied Banking Corporation to be null and void on the
ground that it is not among the properties covered by the SPA executed in favour of
Julian.

Issue: Whether or not the SPA the real estate mortgage constituted on TCT No. RT-
18206 is null and void?

Decision: No. Ratio: The real estate mortgage entered between Julian and Allied
Banking Corporation is not null and void but unerforceable. Under Article 1878
paragraph 12 of the Civil Code, a special power of attorney is necessary in cases
where real rights over immovable property are created or conveyed. However, the
agent may not go beyond nor deviate from the powers specified and defined in the
special power of attorney. In the case at bar, Julian entered into a real estate mortgage
on the strength the SPA executed in his favor. However, it is clear that TCT No. RT-
18206 (106338) was not included among the properties listed in the SPA. Therefore,
Julian was not given the authority to mortgage the subject property which was not
covered by the SPA. This results in the unenforceability of the real estate mortgage.
Name: Escueta vs. LimG.R No. 137162 Jan 24, 2007

Facts: Rufino Lim, herein respondent, averred that she had bought the hereditary
properties of the Petitioners Rubio and heirs of Baloloy. On April 10, 1990 Petitioners
executed a Contract of Sale and received from Respondent Lim a down payment of
102,169.86 and 450,000 respectively and the balance will be paid after the titles are
transferred into Lim’s name. Rubio and the heirs of Baloloy refused to deliver the title
to Lim despite her offer of the payment of the balance. Despite the existence of a
Contract of Sale between Lim and Rubio and the heirs of Baloloy, Corazon Escueta
having knowledge thereof executed a simulated sale involving the lots. As for the
Baloloys, they argued that they already withdrawn their offer to sell for the reason that
respondent failed to pay the balance on time hence the Contract of Sale has no more
force and effect. As to Rubio, it alleged that Lim has no cause of action since, Rubio
appointed her daughter Patricia Llamas to be his attorney-in-fact, and not in favor of
Victoria Laygo Lim who represented Rubio in the sale between the Respondent Rufina
Lim. The RTC declared the Petitioners in default. CA affirmed RTC decision with
amendments. Hence, this petition.

Issue: Whether or not the Contract of Sale between Rufina Lim and the Petitioners
Rubio and Baloloys is valid?

Decision: Yes, the Contract of Sale is valid. The Court held that the Contract of Sale
between the petitioner and respondent is valid and binding. Rubio argued that Victoria
has no authority to represent him in the Sale of the disputed properties since Rubio
appointed her daughter as his attorney-in-fact and not Victoria. Art. 1892 provides:
Article 1892 of the Civil Code provides: Art. 1892. The agent may appoint a substitute
if the principal has not prohibited him from doing so; but he shall be responsible for
the acts of the substitute:(1) When he was not given the power to appoint one. In the
case above, Rubio made his daughter Patricia to be her Attorney-in –fact, and
according to the above article, Patricia is not prohibited to appoint a substitute as a
representative of Rubio. Patricia, acting on the authority given to her, appointed
Victoria as her substitute hence the transaction between Victoria and Respondent is
valid. Art. 1317 further provides: Art. 1317. A contract entered into in the name of
another by one who has no authority or legal representation, or who has acted beyond
his powers, shall be unenforceable, unless it is ratified, expressly or impliedly, by the
person on whose behalf it has been executed, before it is revoked by the other
contracting party. The acceptance of Rubio of the downpayment and encashment of
the said checks serves as the ratification of Rubio of the Sale of the Properties with
the respondent Rufina Lim.
2008

Name: LOPEZ v. CA G.R. No. 157784 December 16, 2008 Ponente: TINGA

Facts: On 23 March 1968, Juliana executed a notarial will, whereby she expressed
that she wished to constitute a trust fund for her paraphernal properties, denominated
as Fideicomiso de Juliana Lopez Manzano (Fideicomiso), to be administered by her
husband. If her husband were to die or renounce the obligation, her nephew, Enrique
Lopez, was to become administrator and executor of the Fideicomiso. Two-thirds (2/3)
of the income from rentals over these properties were to answer for the education of
deserving but needy honor students, while one-third 1/3 was to shoulder the expenses
and fees of the administrator. As to her conjugal properties, Juliana bequeathed the
portion that she could legally dispose to her husband, and after his death, said
properties were to pass to her biznietos or great grandchildren. Juliana initiated the
probate of her will five (5) days after its execution, but she died on 12 August 1968,
before the petition for probate could be heard. The petition was pursued instead in
Special Proceedings (S.P.) No. 706 by her husband, Jose, who was the designated
executor in the will. On 7 October 1968, the Court of First Instance, Branch 3, Balayan,
Batangas, acting as probate court, admitted the will to probate and issued the letters
testamentary to Jose. Jose then submitted an inventory of Juliana’s real and personal
properties with their appraised values, which was approved by the probate court.
Thereafter, Jose filed a Report dated 16 August 1969, which included a proposed
project of partition. Jose proceeded to offer a project of partition. Then, Jose listed
those properties which he alleged were registered in both his and Juliana’s names,
totaling 13 parcels in all. The disputed properties consisting of six (6) parcels, all
located in Balayan, Batangas, were included in said list. On 25 August 1969, the
probate court issued an order approving the project of partition. As to the properties to
be constituted into the Fideicomiso, the probate court ordered that the certificates of
title thereto be cancelled, and, in lieu thereof, new certificates be issued in favor of
Jose as trustee of the Fideicomiso covering one-half (1/2) of the properties listed under
paragraph 14 of the project of partition; and regarding the other half, to be registered
in the name of Jose as heir of Juliana. The properties which Jose had alleged as
registered in his and Juliana’s names, including the disputed lots, were adjudicated to
Jose as heir, subject to the condition that Jose would settle the obligations charged on
these properties. The probate court, thus, directed that new certificates of title be
issued in favor of Jose as the registered owner thereof in its Order dated 15 September
1969. On even date, the certificates of title of the disputed properties were issued in
the name of Jose. The Fideicomiso was constituted in S.P No. 706 encompassing
one-half (1/2) of the Abra de Ilog lot on Mindoro, the 1/6 portion of the lot in Antorcha
St. in Balayan, Batangas and all other properties inherited ab intestato by Juliana from
her sister, Clemencia, in accordance with the order of the probate court in S.P. No.
706. The disputed lands were excluded from the trust. Jose died on 22 July 1980,
leaving a holographic will disposing of the disputed properties to respondents. The will
was allowed probate on 20 December 1983 in S.P. No. 2675 before the RTC of Pasay
City. Pursuant to Jose’s will, the RTC ordered on 20 December 1983 the transfer of
the disputed properties to the respondents as the heirs of Jose. Consequently, the
certificates of title of the disputed properties were cancelled and new ones issued in
the names of respondents. Petitioner’s father, Enrique Lopez, also assumed the
trusteeship of Juliana’s estate. On 30 August 1984, the RTC of Batangas, Branch 9
appointed petitioner as trustee of Juliana’s estate in S.P. No. 706. On 11 December
1984, petitioner instituted an action for reconveyance of parcels of land with sum of
money before the RTC of Balayan, Batangas against respondents. The complaint
essentially alleged that Jose was able to register in his name the disputed properties,
which were the paraphernal properties of Juliana, either during their conjugal union or
in the course of the performance of his duties as executor of the testate estate of
Juliana and that upon the death of Jose, the disputed properties were included in the
inventory as if they formed part of Jose’s estate when in fact Jose was holding them
only in trust for the trust estate of Juliana. The RCT dismissed the petition on the
ground of prescription. The CA denied the appeals filed by both parties. Hence, this
petition.

Issue: Whether an implied trust was constituted over the disputed properties when
Jose, the trustee, registered them in his name?

Decision: The disputed properties were excluded from the Fideicomiso at the outset.
Jose registered the disputed properties in his name partly as his conjugal share and
partly as his inheritance from his wife Juliana, which is the complete reverse of the
claim of the petitioner, as the new trustee, that the properties are intended for the
beneficiaries of the Fideicomiso. Furthermore, the exclusion of the disputed properties
from the Fideicomiso was approved by the probate court and, subsequently, by the
trial court having jurisdiction over the Fideicomiso. The registration of the disputed
properties in the name of Jose was actually pursuant to a court order. The apparent
mistake in the adjudication of the disputed properties to Jose created a mere implied
trust of the constructive variety in favor of the beneficiaries of the Fideicomiso.
Name: SUNGA, petitioners, vs. COURT OF APPEALS, respondents.
G.R. No. 164401, June 25, 2008

Facts: On June 22, 1992, respondent Lamberto T. Chua filed a complaint against
petitioners, Lilibeth Sunga-Chan and Cecilia Sunga, daughter and wife, respectively
of the deceased Jacinto L. Sunga, for winding up of Partnership Affairs, accounting,
appraisal land recovery of Shares and Damages with Writ of Preliminary
Attachment with the Regional Trial Court, Branch 11, Zamboanga del Norte.
Respondent alleged that in 1977, he verbally entered into a partnership with
Jacinto in the distribution of Shellane Liquefied Petroleum Gas (LPG) in Manila
with initial capital contribution ofPhp100,000.00 each, with the intention that the
profits would be equally divided between them. For business convenience,
respondent and Jacinto agreed to register the business name of their partnership
SHELLITE GAS APPLIANCE CENTER under the name of Jacinto as sole
proprietorship.

Issue: Whether or not respondent Lamberto Chua and Jacinto L.Sunga has
entered into a partnership?

Ruling: Yes. The court ruled that a partnership may be constituted in any form, except
where immovable property or real rights are contributed thereto, in which
case a public instrument shall be necessary. Also, Article 1772 of the Civil
Code requires that partnership with a capital of Php3,000.00 or more must register
with the Securities and Exchange Commission, however this registration requirement
is not mandatory. Article 1768 of the Civil Code explicitly provides that the partnership
retains its juridical personality even if it fails register. The failure to register the contract
of partnership does not invalidate the same as among the partners, so long
as the contract has the essential requisites, because the main purpose of registration
is to give notice to third parties, and it can be assumed that the members themselves
knew of the contents of their contract
Name: Philex Mining Corp. vs. Commissioner of Internal Revenue G.R. No. 148187
April 16, 2008

Facts: Philex Mining Corp. entered into an agreement with Baguio Gold Mining
Co. for the former to manage and operate the latter’s mining claim, known as the Sto.
Nino Mine. The parties’ agreement was denominated as “Power of Attorney” which
provides interalia: Within three (3) years from date thereof, the PRINCIPAL
(Baguio Gold) shall make available to the MANAGERS (Philex Mining) up to ELEVEN
MILLION PESOS(P11,000,000.00), in such amounts as from time to time
may be required by the MANAGERS within the said 3-year period, for use in the
MANAGEMENT of the STO. NINO MINE. The said ELEVENMILLION
PESOS (P11,000,000.00) shall be deemed, for internal audit purposes, as the
owner’s account in the Sto. Nino PROJECT. Any part of any income of the
PRINCIPAL from the STO. NINOMINE, which is left with the Sto. Nino PROJECT,
shall be added to such owner’s account. Philex Mining made advances of cash and
property in accordance with paragraph 5 of the agreement. However, the mine
suffered continuing losses over the years which resulted to Philex Mining’s withdrawal
as manager of the mine and in the eventual cessation of mine operations. The parties
executed a “Compromise with Dation in Payment” wherein Baguio Gold admitted an
indebtedness to petitioner in the amount ofP179,394,000.00 and agreed to pay
the same in three segments. The parties executed an “Amendment to Compromise
with Dation in Payment” where the parties determined that Baguio Gold’s
indebtedness to petitioner actually amounted to P259,137,245.00, which sum
included liabilities of Baguio Gold to other creditors that petitioner had assumed
as guarantor. These liabilities pertained to long-term loans amounting
toUS$11,000,000.00 contracted by Baguio Gold from the Bank of America NT
& SA and Citibank N.A. This time, Baguio Gold undertook to pay petitioner in two
segments by first assigning its tangible assets forP127,838,051.00 and then
transferring its equitable title in its Philo drill assets for P16,302,426.00. The
parties then ascertained that Baguio Gold had a remaining outstanding
indebtedness to petitioner in the amount of P114,996,768.00. In its 1982 annual
income tax return, Philex Mining deducted from its gross income the amount of
P112,136,000.00 as “loss on settlement of receivables from Baguio Gold against
reserves and allowances.” However, the BIR disallowed the amount as deduction
for bad debt and assessed petitioner a deficiency income tax of
P62,811,161.39. Philex Mining protested before the BIR arguing that the deduction
must be allowed since all requisites for a bad debt deduction were satisfied.

Issue: Whether or not the parties entered into a contract of agency coupled with an
interest which is not revocable at will?

Decision: No. In this case, the non-revocation or non-withdrawal under paragraph

5(c) applies to the advances made by petitioner who is supposedly the agent and
not the principal under the contract. Thus, it cannot be inferred from the stipulation
that the parties’ relation under the agreement is one of agency coupled with an interest
and not a partnership. The main object of the “Power of Attorney” was not to confer a
power in favor of petitioner to contract with third persons on behalf of Baguio Gold
but to create a business relationship between petitioner and Baguio Gold, in
which the former was to manage and operate the latter’s mine through the parties’
mutual contribution of material resources and industry. The strongest indication
that petitioner was a partner in the Sto. Nino Mine is the fact that it would receive 50%
of the net profits as compensation under paragraph 12of the agreement. The entirety
of the parties’ contractual stipulations simply leads to no other conclusion than that
petitioner’s “compensation” is actually its share in the income of the joint venture.
Article 1769 (4) of the Civil Code explicitly provides that the “receipt by a person of
a share in the profits of a business is prima facie evidence that he is a partner in the
business.
2009

Name: Yun Kwan Byung vs PAGCOR December 11, 2009

Facts: PAGCOR launched its Foreign Highroller Marketing Program (Program).

The Program aims to invite patrons from foreign countries to play at the dollar pit of
designated PAGCOR-operated casinos under specified terms and conditions and in
accordance with industry practice. The Korean-based ABS Corporation was one of the
international groups that availed of the Program. In a letter-agreement
dated 25 April 1996 (Junket Agreement), ABS Corporation agreed to bring in
foreign players to play at the five designated gaming tables of the Casino
Filipino Silahis at the Grand Boulevard Hotel in Manila (Casino Filipino). Petitioner,
a Korean national, alleges that from November 1996 to March 1997, he came to the
Philippines four times to play for high stakes at the Casino Filipino. PAGCOR claims
that petitioner, who was brought into the Philippines by ABS Corporation, is a
junket player who played in the dollar pit exclusively leased by ABS Corporation for its
junket players. PAGCOR alleges that it provided ABS Corporation with distinct junket
chips. ABS Corporation distributed these chips to its junket players. At the end of each
playing period, the junket players would surrender the chips to ABS Corporation. Only
ABS Corporation would make an accounting of these chips to PAGCOR’s casino
treasury. PAGCOR argues that petitioner is not a PAGCOR player because
under PAGCOR’s gaming rules, gambling chips cannot be brought outside the
casino. Trial Court dismissed the complaint and counterclaim. CA affirmed.

Issue: Whether or not an implied agency was created?

Decision: NO. There is no implied agency in this case because PAGCOR did not hold
out to the public as the principal of ABS Corporation. PAGCOR’s actions did not
mislead the public into believing that an agency can be implied from the
arrangement with the junket operators, nor did it hold out ABS Corporation
with any apparent authority to represent it in any capacity. The Junket Agreement
was merely a contract of lease of facilities and services. Article 1869 of the Civil
Code states that implied agency is derived from the acts of the principal, from
his silence or lack of action, or his failure to repudiate the agency, knowing that another
person is acting on his behalf without authority. Implied agency, being an actual
agency, is a fact to be proved by deductions or inferences from other facts. The law
makes no presumption of agency and proving its existence, nature and extent
is incumbent upon the person alleging it. Whether or not an agency has been created
is a question to be determined by the fact that one represents and is acting for another.
Name: PURITA PAHUD, SOLEDAD PAHUD, and IAN LEE CASTILLA (represented
by Mother and Attorney-in-Fact VIRGINIACASTILLA), Petitioners, - versus -
COURT OF APPEALS et. al., Respondents. G.R. No. 160346 August 25, 2009

Facts: For our resolution is a petition for review on certiorari assailing the April 23,
2003 Decision and October 8, 2003 Resolution of the Court of Appeals (CA) in CA-
G.R. CV No. 59426. The appellate court, in the said decision and resolution,
reversed and set aside the January 14, 1998 Decision of the Regional Trial Court
(RTC), which ruled in favor of petitioners. The dispute stemmed from the following
facts. During their lifetime, spouses Pedro San Agustin and Agatona Genilwere able
to acquire a 246-square meter parcel of land situated in Barangay Anos, Los
Baos, Laguna and covered by Original Certificate of Title (OCT) No. O-(1655) 0-15.
Agatona Genil died on September 13, 1990 while Pedro San Agustin died on
September 14,1991. Both died intestate, survived by their eight (8) children:
respondents Eufemia, Raul, Ferdinand, Zenaida, Milagros, Minerva, Isabelita and
Virgilio. Sometime in 1992, Eufemia, Ferdinand and Raul executed a Deed of Absolute
Sale of Undivided Shares conveying in favor of petitioners (the Pahuds, for brevity)
their respective shares from the lot they inherited from their deceased parents for
P525,000.00. Eufemia also signed the deed on behalf of her four (4) other co-
heirs, namely: Isabelita on the basis of a special power of attorney executed on
September 28, 1991, and also for Milagros, Minerva, and Zenaida but without their
apparent written authority. The deed of sale was also not notarized. On July 21, 1992,
the Pahuds paid P35,792.31 to the Los Banos Rural Bank where the subject property
was mortgaged. The bank issued a release of mortgage and turned over the owners
copy of the OCT to the Pahuds. Over the following months, the Pahuds made more
payments to Eufemia and her siblings totaling to P350,000.00. They agreed
to use the remaining P87,500.00 to defray the payment for taxes and the expenses
in transferring the title of the property. When Eufemia and her co-heirs drafted an
extra-judicial settlement of estate to facilitate the transfer of the title to the Pahuds,
Virgilio refused to sign it. On July 8, 1993, Virgilios co-heirs filed a complaint
for judicial partition of the subject property before the RTC of Calamba,
Laguna. On November 28, 1994, in the course of the proceedings for judicial partition,
a Compromise Agreement was signed with seven (7) of the co-heirs agreeing to sell
their undivided shares to VirgilioforP700,000.00. The compromise agreement was,
however, not approved by the trial court because Atty. Dimetrio Hilbero, lawyer for
Eufemia and her six (6) co-heirs, refused to sign the agreement because he knew
of the previous sale made to the Pahuds. On December 1, 1994, Eufemia
acknowledged having received P700,000.00 from Virgilio. Virgilio then sold
the entire property to spouses Isagani Belarmino and Leticia Ocampo (Belarminos)
sometime in 1994. The Belarminos immediately constructed a building on the
subject property. Alarmed and bewildered by the ongoing construction on the lot they
purchased, the Pahuds immediately confronted Eufemia who confirmed to them
that Virgilio had sold the property to the Belarminos. Aggrieved, the Pahuds
filed a complaint in intervention in the pending case for judicial partition. After trial, the
RTC upheld thevalidity of the sale to petitioners. The dispositive portion of
thedecision reads: Not satisfied, respondents appealed the decision to the CA
arguing, in the main, that the sale made by Eufemia for and on behalf of her other co-
heirs to the Pahuds should have been declared void and inexistent for want of a written
authority from her co-heirs. The CA yielded and set aside the findings of the trial court.
In disposing the issue, the CA ruled: Judicial Partition is hereby REVERSED and SET
ASIDE, and a new one entered.

Issue: The focal issue to be resolved is the status of the sale of the subject property
by Eufemia and her co-heirs to the Pahuds?

Decision: We find the transaction to be valid and enforceable. Also, under Article
1878, a special power of attorney is necessary for an agent to enter into a contract
by which the ownership of an immovable property is transmitted or acquired,
either gratuitously or for a valuable consideration. In several cases, we have
repeatedly held that the absence of a written authority to sell a piece of land is, ipso
jure, void, precisely to protect the interest of an unsuspecting owner from being
prejudiced by the unwarranted act of another. Based on the foregoing, it is not
difficult to conclude, in principle, that the sale made by Eufemia, Isabelita and her
two brothers to the Pahuds sometime in 1992 should be valid only with respect to
the 4/8 portion of the subject property. The sale with respect to the 3/8
portion, representing the shares of Zenaida, Milagros, and Minerva, is void because
Eufemia could not dispose of the interest of her co-heirs in the said lot absent any
written authority from the latter, as explicitly required by law. This was, in fact, the
ruling of the CA. Still, in their petition, the Pahuds argue that the sale with
respect to the 3/8 portion of the land should have been deemed ratified
when the three co-heirs, namely: Milagros, Minerva, and Zenaida, executed their
respective special power of attorneys authorizing Eufemia to represent them in
the sale of their shares in the subject property. While the sale with respect to
the 3/8 portion is void by express provision of law and not susceptible to
ratification, we nevertheless uphold its validity on the basis of the common
law principle of estoppel. Article 1431 of the Civil Code provides: Art. 1431. Through
estoppel an admission or representation is rendered conclusive upon the
person making it, and cannot be denied or disproved as against the person relying
thereon. True, at the time of the sale to the Pahuds, Eufemia was not armed with the
requisite special power of attorney to dispose of the 3/8portion of the property. It is a
basic rule in the law of agency that a principal is subject to liability for loss caused to
another by the latters reliance upon a deceitful representation by an agent in the
course of his employment (1) if the representation is authorized; (2) if it is within the
implied authority of the agent to make for the principal; or (3) if itis apparently
authorized, regardless of whether the agent was authorized by him or not to
make the representation. By their continued silence, Zenaida, Milagros and
Minerva have caused the Pahuds to believe that they have indeed clothed Eufemia
with the authority to transact on their behalf. Clearly, the three co-heirs are now
estopped from impugning the validity of the sale from assailing the authority of Eufemia
to enter into such transaction. Accordingly, the subsequent sale made by the seven
co-heirs to Virgilio was void because they no longer had any interest over the subject
property which they could alienate at the time of the second transaction.
Name: Mendoza v. PauleGR No. 175885 February 13, 2009

Facts: Engineer Eduardo M. Paule is the proprietor of E.M. Paule Construction and
Trading. Paule executed a SPA authorizing Zenaida Mendoza to participate in the
bidding of National Irrigation Administration project and to represent him in all
transactions related thereto. EMPCT, through Mendoza was awarded projects.
Manuel de la Cruz leased heavy equipments to EMPCT through Mendoza. On April
27, 2000, Paule revoked the SPA in favor of Mendoza. Cruz filed an action against
Mendoza and Cruz.

Issue: Whether or not Mendoza is an agent of Paule?

Decision: No. Records show that Paule and Mendoza entered into a partnership in
regard to the NIA project. Paule's contribution is his contractor's license and expertise,
while Mendoza is to secure the funds for labor, materials and services. There is no
valid reason for Paule to revoke Mendoza's SPA. Since Mendoza took care of the
funding it is only logical that the SPA issued were necessary for the performance of
her role in the partnership. Paule's revocation of SPA was done in bad faith. Paule is
liable for abandoning the partnership, leaving Mendoza to fend for her own.
2010

Name: HEIRS OF JOSE LIM, represented by ELENITO LIM, Petitioners, vs. JULIET
VILLA LIM, Respondent. G.R. No. 172690 March 3, 2010

Facts: In 1980, the heirs of Jose Lim alleged that Jose Lim entered into a partnership
agreement with Jimmy Yu and Norberto Uy. The three contributed P50,000.00 each
and used the funds to purchase a truck to start their trucking business. A year later
however, Jose Lim died. The eldest son of Jose Lim, Elfledo Lim, took over the trucking
business and under his management, the trucking business prospered. Elfledo
was able to but real properties in his name. From one truck, he increased it to 9 trucks,
all trucks were in his name however. He also acquired other motor vehicles in his
name. In 1993, Norberto Uy was killed. In 1995, Elfledo Lim died of a heart attack.
Elfledo’s wife, Juliet Lim, took over the properties but she intimated to Jimmy and
the heirs of Norberto that she could not go on with the business. So the properties in
the partnership were divided among them. Now the other heirs of Jose Lim,
represented by Elenito Lim, required Juliet to do an accounting of all income, profits,
and properties from the estate of Elfledo Lim as they claimed that they are co-owners
thereof. Juliet refused hence they sued her. The heirs of Jose Lim argued that Elfledo
Lim acquired his properties from the partnership that Jose Lim formed with Norberto
and Jimmy. In court, Jimmy Yu testified that Jose Lim was the partner and not Elfledo
Lim. The heirs testified that Elfledo was merely the driver of Jose Lim.

Issue: Who is the partner between Jose Lim and Elfledo Lim in a
partnership?

Decision: It is Elfledo Lim based on the evidence presented regardless of Jimmy Yu’s
testimony in court that Jose Lim was the partner. If Jose Lim was the partner, then the
partnership would have been dissolved upon his death (in fact, though the SC did not
say so, I believe it should have been dissolved upon Norberto’s death in
1993). A partnership is dissolved upon the death of the partner. Further, no evidence
was presented as to the articles of partnership or contract of partnership between
Jose, Norberto and Jimmy. Unfortunately, there is none in this case, because
the alleged partnership was never formally organized. Art. 1769. In determining
whether a partnership exists, these rules shall apply:(1) Except as provided by Article
1825, persons who are not partners as to each other are not partners as to third
persons; (2) Co-ownership or co-possession does not of itself establish a
partnership, whether such co-owners or co-possessors do or do not share any profits
made by the use of the property; (3) The sharing of gross returns does not
of itself establish a partnership, whether or not the persons sharing them have a
joint or common right or interest in any property from which the returns a rederived;
(4) The receipt by a person of a share of the profits of a business is a prima facie
evidence that he is a partner in the business, but no such inference shall be drawn if
such profits were received in payment:
a) As a debt by installments or otherwise;
b) As wages of an employee or rent to a landlord;
c) As an annuity to a widow or representative of a deceased partner;
d) As interest on a loan, though the amount of payment vary with the profits of the
business;
e) As the consideration for the sale of a goodwill of a business or other property
by installments or otherwise. Applying the legal provision to the facts of this
case, the following circumstances tend to prove that Elfledo was himself the
partner of Jimmy and Norberto.
Name: Marsman Drysdale Land, INC., petitioner, vs. PHILIPPINE GEOANALYTICS,
INC. AND GOTESCOPROPERTIES, INC., respondents. G.R. No. 183374. June
29, 2010.

Facts: Marsman Drysdale, Inc. (Marsman) and Gotesco Properties,Inc. (Gotesco)

entered into a joint venture agreement for the construction and development
of an office building on a land owned by Marsman. They agreed on a 50-50 ratio on
the proceeds of the project, but did not agree on how losses would be divided. The
jointventure engaged the services of Philippine Geoanalytics, Inc. (PGI) to provide
subsurface soil exploration, seismic study and geotechnical engineering. PGI
completed its seismic study but failed to complete its subsurface soil exploration
because the area where drilling was to be made had not been cleared. The
building project was subsequently shelved due to unfavorable economic conditions.
PGI billed the joint venture for work done, but was not paid despite its repeated
demands. PGI, thus, filed a collection case against Marsman and Gotesco.
Marsman passed the obligation to Gotesco because under the joint venture
agreement, Gotesco was solely liable for the monetary expenses of the project,
and Marsman’s participation was limited to the land. Gotesco, on the other hand,
asserted that PGI had no cause of action against it as PGI had yet to complete the
services in its contract, and it was Marsman’s failure to clear the property of debris
which prevented PGI from completing its work.

Issue: Whether or not a joint venture between Marsman and Gotescois a form of
partnership?

Decision: Yes. A joint venture being a form of partnership, it is to be governed

by the laws on partnership. Under the laws on partnership, particularly Article 1797 of
the Civil Code, the losses and profits shall be distributed in accordance with the
agreement; if only the share of each partner in the profits has been agreed upon, the
share of each in the losses shall be in the same proportion. In the joint venture
agreement, Marsman and Gotesco agreed on a 50-50 ratio on the proceeds of the
project, but did not provide for the splitting of losses. Applying Article 1797, the
same ratio applies in splitting the obligation-loss of the joint venture to PGI.
When there are two or more debtors, the obligation is presumed to be joint unless the
law or the obligation expressly states that the liability is solidary, or unless the
nature of the obligation requires solidary liability (Articles 1207 and 1208,
Civil Code). In this case, since solidary liability was not required by law, or the
contract, or by the nature of the obligation, the obligation to PGI was presumed
to be joint between Marsman and Gotesco.
Name: FEDERICO JARANTILLA, JR., Petitioner, vs. ANTONIETA JARANTILLA,
BUENAVENTURA REMOTIGUE, substituted by CYNTHIA REMOTIGUE, DOROTEO
JARANTILLA and TOMAS JARANTILLA, Respondents. G.R. No. 154486
December 1, 2010

Facts: The present case stems from the complaint filed by Antonieta Jarantilla
against Buenaventura Remotigue, Cynthia Remotigue, Federico Jarantilla, Jr.,
Doroteo Jarantilla and Tomas Jarantilla, for the accounting of the assets and
income of the co-ownership, for its partition and the delivery of her share
corresponding to eight percent (8%), and for damages. Antonieta claimed that in
1946, she had entered into an agreement with the defendants to engage in
business through the execution of a document denominated as
"Acknowledgement of Participating Capital. Antonieta also alleged that she
had helped in the management of the business they co-owned without receiving any
salary. Antonieta further claimed co-ownership of certain properties (the subject
real properties) in the name of the defendants since the only way the defendants could
have purchased these properties were through the partnership as they had no other
source of income.

Issue: Whether or not a partnership exists between the parties subject to the
Acknowledgement of Participating Capital?

Decision: Yes, under Article 1767 of the Civil Code, there are two essential
elements in a contract of partnership:(a) an agreement to contribute money,
property or industry to a common fund; and (b) intent to divide the profits among
the contracting parties. The first element is undoubtedly present in the case at bar, for,
admittedly, all the parties in this case have agreed to, and did contribute money and
property to a common fund. Hence, the issue narrows down to their intent in acting as
they did. They have admitted this fact agreed to its veracity, and even
submitted one common documentary evidence to prove such partnership -
the Acknowledgement of Participating Capital.
2011

Name: CESAR C. LIRIO, doing business under the name and style of CELKOR AD
SONICMIX, Petitioner, v. WILMER D. GENOVIA, Respondent. GR. No. 169757
November 23, 2011

Facts: Respondent was allegedly hired on August 15, 2001 as studio manager by
petitioner Lirio, owner of Celkor Ad Sonicmix Recording Studio (Celkor). A few days
after he started working as a studio manager, petitioner approached him and told him
about his project to produce an album for his 15-year-old daughter. Petitioner asked
respondent to compose and arrange songs for Celine and promised that he (Lirio)
would draft a contract to assure respondent of his compensation for such services. As
agreed upon, the additional services that respondent would render included
composing and arranging musical scores only, while the technical aspect in producing
the album, such as digital editing, mixing and sound engineering would be performed
by respondent in his capacity as studio manager for which he was paid on a monthly
basis. Respondent reminded petitioner about his compensation as composer and
arranger of the album. Petitioner verbally assured him that he would be duly
compensated. By mid-November 2001, respondent finally finished the compositions
and musical arrangements of the songs to be included in the album. Thereafter,
respondent was tasked by petitioner to prepare official correspondence, establish
contacts and negotiate with various radio stations, malls, publishers, record
companies and manufacturers, record bars and other outlets in preparation for the
promotion of the said album. By early February 2002, the album was in its
manufacturing stage. On February 26, 2002, respondent again reminded petitioner
about the contract on his compensation as composer and arranger of the album.
Petitioner told respondent that since he was practically a nobody and had proven
nothing yet in the music industry, respondent did not deserve a high compensation,
and he should be thankful that he was given a job to feed his family. Petitioner informed
respondent that he was entitled only to 20% of the net profit, and not of the gross sales
of the album, and that the salaries he received and would continue to receive as studio
manager of Celkor would be deducted from the said 20% net profit share. Respondent
objected and insisted that he be properly compensated. On March 14, 2002, petitioner
verbally terminated respondent's services, and he was instructed not to report for work.
On July 9, 2002, respondent Wilmer D. Genovia filed a complaint against petitioner for
illegal dismissal, non-payment of commission and award of moral and exemplary
damages. Petitioner asserted that from the aforesaid terms and conditions, his
relationship with respondent is one of an informal partnership under Article 1767 of the
New Civil Code, since they agreed to contribute money, property or industry to a
common fund with the intention of dividing the profits among themselves. Petitioner
had no control over the time and manner by which respondent composed or arranged
the songs, except on the result thereof.

Issue: Whether or not an employer-employee relationship existed between petitioner

and respondent?

Decision: The elements to determine the existence of an employment relationship

are:(a) The selection and engagement of the employee;(b) The payment of wages;(c)
The power of dismissal; and(d) The employer's power to control the employee's
conduct. The most important element is the employer's control of the employee's
conduct, not only as to the result of the work to be done, but also as to the means and
methods to accomplish it. It is settled that no particular form of evidence is required to
prove the existence of an employer-employee relationship. Any competent and
relevant evidence to prove the relationship may be admitted. In this case, the
documentary evidence presented by respondent to prove that he was an employee of
petitioner are as follows:(a) a document denominated as "payroll" certified correct by
petitioner, which showed that respondent received a monthly salary of P7,000.00
(P3,500.00 every 15th of the month and another P3,500.00 every 30th of the month)
with the corresponding deductions due to absences incurred by respondent; and (2)
copies of petty cash vouchers, showing the amounts he received and signed for in the
payrolls. The said documents showed that petitioner hired respondent as an employee
and he was paid monthly wages of P7,000.00. Petitioner wielded the power to dismiss
as respondent stated that he was verbally dismissed by petitioner, and respondent,
thereafter, filed an action for illegal dismissal against petitioner. The power of control
refers merely to the existence of the power. It is not essential for the employer to
actually supervise the performance of duties of the employee, as it is sufficient that the
former has a right to wield the power. Nevertheless, petitioner stated in his Position
Paper that it was agreed that he would help and teach respondent how to use the
studio equipment. In such case, petitioner certainly had the power to check on the
progress and work of respondent. On the other hand, petitioner failed to prove that his
relationship with respondent was one of partnership. Such claim was not supported by
any written agreement. It is a well-settled doctrine, that if doubts exist between the
evidence presented by the employer and the employee, the scales of justice must be
tilted in favor of the latter. Based on the foregoing, it is clear that an employer-
employee relationship existed between petitioner and respondent.
Name: JOSEFINA P. REALUBIT vs. PROSENCIO D. JASO and EDENG JASOG.R.
No. 178782 September 21, 2011

Facts: Petitioner Josefina Realubit entered into a Joint Venture Agreement with
Francis Eric Amaury Biondo, a French national, for the operation of an ice
manufacturing business. With Josefina as the industrial partner and Biondo as the
capitalist partner, the parties agreed that they would each receive 40% of the net profit,
with the remaining 20% to be used for the payment of the ice making machine which
was purchased for the business. For and in consideration of the sum of P500,000.00,
however, Biondo subsequently executed a Deed of Assignment transferring all his
rights and interests in the business in favor of respondent Eden Jaso, the wife of
respondent Prosencio Jaso. With Biondo’s eventual departure from the country, the
Spouses Jaso caused their lawyer to send Josefina a letter apprising her of their
acquisition of said Frenchmans share in the business and formally demanding an
accounting and inventory thereof as well as the remittance of their portion of its profits.
Faulting Josefina with unjustified failure to heed their demand, the Spouses Jaso
commenced the instant suit for specific performance, accounting, examination, audit
and inventory of assets and properties, dissolution of the joint venture, appointment of
a receiver and damages. The said complaint alleged that the Spouses Realubit had
no gainful occupation or business prior to their joint venture with Biondo and that aside
from appropriating for themselves the income of the business, they have fraudulently
concealed the funds and assets thereof thru their relatives, associates or dummies.
The Spouses Realubit claimed that they have been engaged in the tube ice trading
business under a single proprietorship even before their dealings with Biondo. The
RTC rendered its Decision discounting the existence of sufficient evidence from which
the income, assets and the supposed dissolution of the joint venture can be
adequately reckoned. Upon the finding, however, that the Spouses Jaso had been
nevertheless subrogated to Biondos rights in the business in view of their valid
acquisition of the latter’s share as capitalist partner. On appeal before the CA, the
foregoing decision was set aside. Upon the following findings that the Spouses Jaso
validly acquired Biondos share in the business which had been transferred to and
continued its operations and not dissolved as claimed by the Spouses Realubit.

Issue/s:
1. Whether there was a valid assignment or rights to the joint venture?
2. Whether the joint venture is a contract of partnership?
3. Whether Jaso acquired the title of being a partner based on the Deed of
Assignment?

Decisions:
1. Yes. As a public document, the Deed of Assignment Biondo executed in favor of
Eden not only enjoys a presumption of regularity but is also considered prima facie
evidence of the facts therein stated. A party assailing the authenticity and due
execution of a notarized document is, consequently, required to present evidence that
is clear, convincing and more than merely preponderant. In view of the Spouses
Realubits failure to discharge this onus, we find that both the RTC and the CA correctly
upheld the authenticity and validity of said Deed of Assignment upon the combined
strength of the above-discussed disputable presumptions and the testimonies elicited
from Eden and Notary Public Rolando Diaz.2. Yes. Generally understood to mean an
organization formed for some temporary purpose, a joint venture is likened to a
particular partnership or one which has for its object determinate things, their use or
fruits, or a specific undertaking, or the exercise of a profession or vocation. The rule is
settled that joint ventures are governed by the law on partnerships which are, in turn,
based on mutual agency or delectus personae.3. No. It is evident that the transfer by
a partner of his partnership interest does not make the assignee of such interest a
partner of the firm, nor entitle the assignee to interfere in the management of the
partnership business or to receive anything except the assignees profits. The
assignment does not purport to transfer an interest in the partnership, but only a future
contingent right to a portion of the ultimate residue as the assignor may become
entitled to receive by virtue of his proportionate interest in the capital. Since a partner’s
interest in the partnership includes his share in the profits, we find that the CA
committed no reversible error in ruling that the Spouses Jaso are entitled to Biondos
share in the profits, despite Juanitas lack of consent to the assignment of said
Frenchmans interest in the joint venture. Although Eden did not, moreover, become a
partner as a consequence of the assignment and/or acquire the right to require an
accounting of the partnership business, the CA correctly granted her prayer for
dissolution of the joint venture conformably with the right granted to the purchaser of
a partner’s interest under Article 1831 of the Civil Code.
Name: Philippine Charter Insurance Corporation vs. Explorer Maritime Co. et al
G.R. No. 175409September 7, 2011

Facts: In 1995, petitioner Philippine Charter Insurance Corporation (PCIC), as insurer-

subrogee, filed with a Complaint against the following respondents: the unknown
owner of the vessel M/V "Explorer" (common carrier), Wallem Philippines Shipping,
Inc. (ship agent), Asian Terminals, Inc.(arrastre), and Foremost International Port
Services, Inc. (broker). PCIC sought to recover from the respondents the sum
representing the value of lost or damaged shipment paid to the insured, interest and
attorney‟s fees. In 2000, the respondent common carrier, "the Unknown Owner" of the
vessel M/V "Explorer," and Wallem Philippines Shipping, Inc. filed a Motion to Dismiss
on the ground that PCIC failed to prosecute its action for an unreasonable length of
time because PCIC had not set the case for pre-trial. PCIC opposed this, saying that
it was waiting for the resolution of its Motion to Disclose the identity of the “Unknown
Owner”, which it allegedly filed with another branch of the court. According to PCIC, it
was premature for it to move for the setting of the pre-trial conference before the
resolution of the Motion to Disclose.

Issue: Whether or not the petitioner‟s Motion to Disclose has to be resolved before
the case is set for trial?

Decision: No. Respondent Explorer Maritime Co., Ltd., which was then referred to as
the "Unknown Owner of the vessel M/V Explorer,” had already been properly
impleaded pursuant to Section 14, Rule 3 of the Rules of Court. As all the parties have
been properly impleaded, the resolution of the Motion to Disclose was unnecessary
for the purpose of setting the case for pre-trial. Furthermore, Section 3, Rule 3 of the
Rules of Court likewise provides that an agent acting in his own name and for the
benefit of an undisclosed principal may sue or be sued without joining the principal
except when the contract involves things belonging to the principal. Since the action
filed by PCIC was an action for damages, the agent may be properly sued without
impleading the principal. Thus, even assuming that petitioner had filed its Motion to
Disclose with the proper court, its pendency did not bar PCIC from moving for the
setting of the case for pre-trial as required under Rule 18, Section 1 of the Rules of
Court.
2012

Name: Spouses Fernando and Lourdes Viloria vs. Continental Airlines, Inc. G.R. No.
188288 January 16, 2012

Facts: In 1997, while the spouses Viloria were in the United States, they approached
Holiday Travel, a travel agency working for Continental Airlines, to purchase tickets
from Newark to San Diego. The travel agent, Margaret Mager, advised the couple
that they cannot travel by train because it is fully booked; that they must purchase
plane tickets for Continental Airlines; that if they won’t purchase plane tickets;
they’ll never reach their destination in time. The couple believed Mager’s
representations and so they purchased two plane tickets worth $800.00. Later
however, the spouses found out that the train trip isn’t fully booked and so they
purchased train tickets and went to their destination by train instead. Then they called
up Mager to request for a refund for the plane tickets. Mager referred the
couple to Continental Airlines. As the couple are now in the Philippines, they filed
their request with Continental Airline’s office in Ayala. The spouses Viloria
alleged that Mager misled them into believing that the only way to travel was by plane
and so they were fooled into buying expensive tickets. Continental Airlines refused to
refund the amount of the ticket and so the spouses sued the airline company. In its
defense, Continental Airlines claimed that the ticket sold to them by Mager
is non-refundable; that, if any, they are not bound by the misrepresentations of Mager
because there’s no agency existing between Continental Airlines and Mager. The trial
court ruled in favor of spouses Viloria but the Court of Appeals reversed
the ruling of the RTC.

Issue: Whether or not a contract of agency exists between Continental Airlines and
Mager?

Decision: Yes. All the elements of agency are present, to wit: there is consent,
express or implied of the parties to establish the relationship; the object is the
execution of a juridical act in relation to a third person; the agent acts as a
representative and not for himself, and the agent acts within the scope of his authority.
The first and second elements are present as Continental Airlines does not
deny that it concluded an agreement with Holiday Travel to which Mager is part of,
whereby Holiday Travel would enter into contracts of carriage with third persons on
the airlines’ behalf. The third element is also present as it is undisputed that Holiday
Travel merely acted in a representative capacity and it is Continental Airlines and not
Holiday Travel who is bound by the contracts of carriage entered into by
Holiday Travel on its behalf. The fourth element is also present considering
that Continental Airlines has not made any allegation that Holiday Travel exceeded
the authority that was granted to it. Continental Airlines also never questioned the
validity of the transaction between Mager and the spouses. Continental Airlines is
therefore in estoppels. Continental Airlines cannot be allowed to take an altogether
different position and deny that Holiday Travel is its agent without condoning or giving
imprimatur to whatever damage or prejudice that may result from such denial or
retraction to Spouses Viloria, who relied on good faith on Continental Airlines’ acts in
recognition of Holiday Travel’s authority. Estoppel is primarily based on the doctrine
of good faith and the avoidance of harm that will befall an innocent party due to its
injurious reliance, the failure to apply it in this case would result in gross travesty of
justice.
Name: Tom Tan vs. Heirs of Antonio Yamson
G.R. No. 163182 October 24, 2012

Facts: Petitioners were owners of seven parcels of land located in Mandaue City. In
order to raise funds to meet their unpaid obligations to a certain Philip Lo, they decided
to sell their properties. They issued the Authority to Look for Buyer/Buyers on May 19,
1998 in favor of Yamson to facilitate their search for prospective buyers. Subsequently,
two lots were sold to Kimhee Realty Corporation, represented by Oscar Chua, and the
relevant parties executed the Deed of Absolute Sale. Yamson then demanded his
commission from petitioners for the sale of the lots to his registered buyer. Petitioners,
however, refused to pay him, arguing that he was not entitled to his commission
because it was petitioners themselves who introduced Yamson to Chua and that the
agreement was for Yamson to sell all seven lots, which he failed to accomplish.

Issue: Whether Yamson was entitled to the payment by petitioners of his broker's
commission?

Decision: Yes. A plain reading of the Authority to Look for Buyer/Buyers reveals that
nowhere in the said document is it indicated that the sale of all seven lots was a
prerequisite to the payment by petitioners of Yamson's commission. If petitioners'
intention was for Yamson to locate a buyer for all their properties, then they should
have had this condition reduced to writing and included in the Authority to Look for
Buyer/Buyers that they executed. Since no such stipulation appears, then it would be
fair to conclude that the petitioners had no such intention. Thus, Yamson is entitled to
his commission for the sale of the two lots.
Name: Albert Ching v. Felix Bantolo, G.R. No. 177086December 5, 2012

Facts: Respondents Felix M. Bantolo, Antonio O. Adriano and Eulogio Sta. Cruz, Jr.
are owners of several parcels of land situated in Tagaytay City. On April 3, 2000,
respondents executed in favor of petitioners Albert Ching (Ching) and Romeo J.
Bautista a Special Power of Attorney (SPA) authorizing petitioners to obtain a loan
using respondents' properties as collateral. On July 18, 2000, the Philippine Veterans
Bank (PVB) approved the loan application of petitioner Ching in the amount of P25
million. On July 31, 2000, petitioner Ching thru a letter informed respondents of the
approval of the loan. Sometime in the first week of August 2000, petitioners learned
about the revocation of the SPA. Petitioners alleged that the SPA is irrevocable
because it is a contract of agency coupled with interest. According to them, they
agreed to defray the costs or expenses involved in processing the loan because
respondents promised that they would have an equal share in the proceeds of the loan
or the subject properties. On the other hand, respondents alleged that they executed
the SPA in favor of petitioners because of their assurance that they would be able to
get a loan in the amount of P50 million and that P30 million would be given to
respondents within a month's time. Later, they were informed that the loan was
approved in the amount of P25 million and that their share would be P6 million. Since
it was not the amount agreed upon, respondents revoked the SPA and demanded the
return of the titles.

Issue: Whether the contract of agency may be revoked?

Decision: Yes. There is no question that the SPA executed by respondents in favor
of petitioners is a contract of agency coupled with interest. This is because their
bilateral contract depends upon the agency. Hence, it cannot be revoked at the sole
will of the principal. Furthermore, petitioner Ching is entitled to actual damages in the
amount of P500,000.00without any condition. In exchange for his possession of the
titles, petitioner Ching advanced the amount of P500,000.00 to respondents.
Considering that the loan application with PVB did not push through, respondents are
liable to return the said amount to petitioner Ching.
2013

Name: Sally Yoshizaki vs. Joy Training Center of Aurora, Inc.GR 174978 July 31,
2013

Facts: On November 10, 1998, the spouses Richard and Linda Johnson sold the
real properties, a Wrangler jeep, and other personal properties in favor of the spouses
Sally and Yoshio Yoshizaki. On the same date, a Deed of Absolute Sale and a Deed
of Sale of Motor Vehicle were executed in favor of the spouses Yoshizaki.
The spouses Johnson were members of Joy Training’s board of trustees at the time
of sale. On December 7, 1998, TCT No. T-25334 was cancelled and TCT No. T-26052
was issued in the name of the spouses Yoshizaki. On December 8, 1998, Joy Training,
represented by its Acting Chairperson Reuben V. Rubio, filed an action for the
Cancellation of Sales and Damages with prayer for the issuance of a Temporary
Restraining Order and/or Writ of Preliminary Injunction against the spouses
Yoshizaki and the spouses Johnson before the Regional Trial Court of Baler,
Aurora (RTC).In the complaint, Joy Training alleged that the spouses Johnson sold its
properties without the requisite authority from the board of directors. It assailed the
validity of a board resolution dated September 1, 1998 which purportedly granted
the spouses Johnson the authority to sell its real properties. It averred that only a
minority of the board, composed of the spouses Johnson and Alexander Abadayan,
authorized the sale through the resolution. After the presentation of their testimonial
evidence, the spouses Yoshizaki formally offered in evidence photocopies of the
resolution and certification, among others. Joy Training objected to the formal offer of
the photocopied resolution and certification on the ground that they were not the best
evidence of their contents. In an Order dated May 18, 2004, the RTC denied the
admission of the offered copies. The RTC ruled in favor of the spouses Yoshizaki. It
found that Joy Training owned the real properties. However, it held that the sale was
valid because Joy Training authorized the spouses Johnson to sell the real properties.
The CA upheld the RTC’s jurisdiction over the case but reversed its ruling
with respect to the sale of real properties. It maintained that the present
action is cognizable by the RTC because it involves recovery of ownership from third
parties. It also ruled that the resolution is void because it was not
approved by a majority of the board of trustees. It stated that under Section 25 of the
Corporation Code, the basis for determining the composition of the board of trustees
is the list fixed in the articles of incorporation.

Issue: Whether or not there was a contract of agency to sell the real properties
between Joy Training and the spouses Johnson?

Decision: There is no contract of agency between Joy Training and the spouses
Johnson to sell the parcel of land with its improvements Article 1868 of the Civil
Code defines a contract of agency as a contract whereby a person “binds
himself to render some service or to do something in representation or on behalf of
another, with the consent or authority of the latter.” It may be express, or implied from
the acts of the principal, from his silence or lack of action, or his failure to repudiate
the agency, knowing that another person is acting on his behalf without authority. The
special power of attorney mandated by law must be one that expressly mentions a
sale or that includes a sale as a necessary ingredient of the authorized act. We
unequivocably declared in Cosmic Lumber Corporation v. Court of Appeals that a
special power of attorney must express the powers of the agent in clear
and unmistakable language for the principal to confer the right upon an agent to sell
real estate. When there is any reasonable doubt that the language so used conveys
such power, no such construction shall be given the document. In the present case,
Sally presents three pieces of evidence which allegedly prove that Joy Training
specially authorized the spouses Johnson to sell the real properties The CA’s position
that the basis for determining the board of trustees’ composition is the trustees
as fixed in the articles of incorporation and not the actual members of the board.
The second paragraph of Section 25 of the Corporation Code expressly provides that
a majority of the number of trustees as fixed in the articles of incorporation shall
constitute a quorum for the transaction of corporate business. CA decision
affirmed, petition denied.
Name: Joseph Goyanko Jr. v. UCPB G.R. No. 179096 February 06, 2013

Facts: In 1995, the late Joseph Goyanko, Sr. invested P2,000,000.00 with Philippine
Asia Lending Investors, Inc. family, represented by petitioner, and his illegitimate
family presented conflicting claims to PALII for the release of the investment. Pending
the investigation of the conflicting claims, PALII deposited the proceeds of the
investment with UCPB on under the name "Phil Asia: ITF (In Trust for) The Heirs of
Joseph Goyanko, Sr.". On September 27, 1997, the deposit under the ACCOUNT was
P1,509,318.76. On December 11, 1997, UCPB allowed PALII to withdraw
P1,500,000.00 from the Account, leaving a balance of only P9,318.76. When UCPB
refused the demand to restore the amount withdrawn plus legal interest, the petitioner
filed a complaint before the RTC. In its answer to the complaint, UCPB admitted,
among others, the opening of the ACCOUNT under the name "ITF The Heirs of Joseph
Goyanko, Sr.," and the withdrawal on December 11, 1997. RTC dismissed the
petitioner‟s complaint ruling that the words "ITF HEIRS" is not sufficient to charge
UCPB with knowledge of any trust relation between PALII and Goyanko‟s heirs. It
concluded that UCPB merely performed its duty as a depository bank in allowing PAL
II to withdraw from the ACCOUNT, as the contract of deposit was officially only
between PAL II, in its own capacity, and UCPB. CA affirmed the ruling of the RTC and
held that no express trust was created between the HEIRS and PALII.

Issue: Whether UCPB is liable for the amount withdrawn as a trust agreement existed
between PAL II and UCPB, in favor of the HEIRS, when PALII opened the ACCOUNT
with UCPB?

Decision: No. The elements of an express trust include a competent trustor and
trustee, an ascertainable trust res, and sufficiently certain beneficiaries. Each of the
above elements is required to be established, and, if any one of them is missing, it is
fatal to the trust. There must be a present and complete disposition of the trust
property, notwithstanding that the enjoyment in the beneficiary will take place in the
future. It is essential, too, that the purpose be an active one to prevent trust from being
executed into a legal estate or interest, and one that is not in contravention of some
prohibition of statute or rule of public policy. There must also be some power of
administration other than a mere duty to perform a contract although the contract is
fora third party beneficiary. A declaration of terms is essential, and these must be
stated with reasonable certainty in order that the trustee may administer, and that the
court, if called upon so to do, may enforce, the trust. Under these standards, no
express trust was created in the present case. First, while an ascertainable trust res
and sufficiently certain beneficiaries may exist, a competent trustor and trustee do not.
Second, UCPB, as trustee of the ACCOUNT, was never under any equitable duty to
deal with or given any power of administration over it. On the contrary, it was PALII
that undertook the duty to hold the title to the ACCOUNT for the benefit of the HEIRS.
Third, PAL II, as the trustor, did not have the right to the beneficial enjoyment of the
ACCOUNT. Finally, the terms by which UCPB is to administer the ACCOUNT was not
shown with reasonable certainty. While we agree with the petitioner that a trust’s
beneficiaries need not be particularly identified for a trust to exist, the intention to
create an express trust must first be firmly established, along with the other elements
laid above; absent these, no express trust exists.
Name: Recio vs. Heirs of the Spouses Aguedo and Maria Altamirano 702 SCRA 137,
G.R. No. 182349 July 24, 2013

Facts: The Altamiranos offered to sell a parcel of land located in Lipa Batangas to
Nena for the price of P500,000.00, but the transaction did not push through.
Thereafter, Nena's son Reman Recio renewed Nena’s option to purchase the property
to which Alejandro Altamirano, who introduced himself as representative of the
Altamiranos, verbally agreed. Thereafter, Reman Recio made partial payments in the
total amount of P160,000.00, which were duly received and acknowledged by
Alejandro. Subsequently, Reman Recio offered to pay the remaining balance of the
agreed purchase price of the subject property in the amount of P340,000.00, but
Alejandro kept on avoiding the petitioner. Because of this, the petitioner demanded
from the Altamiranos, through Alejandro, the execution of a Deed of Absolute Sale in
exchange for the full payment of the agreed price. Thus, on February 24, 1997, the
petitioner filed a complaint for Specific Performance with Damages. However,
thereafter, the petitioner discovered that the subject property has been subsequently
sold to Lauro and Marcelina Lajarca (Spouses Lajarca). RTC declared the subsequent
sale to spouses Lajarca null and void. CA declared the deed of absolute sale between
the Altamiranos and the Spouses Lajarca valid only insofar as the aliquot shares of
the other Altamiranos are concerned.

Issue: Whether or not the previous and subsequent contracts of sale are both valid?

Decision: Yes. A valid contract of sale requires: (a) a meeting of minds of the parties
to transfer ownership of the thing sold in exchange for a price; (b) the subject matter,
which must be a possible thing; and (c) the price certain in money or its equivalent. All
said elements were present in both contracts of sale, thus both are valid. As to the
contract of sale between Recio and Alejandro, the determinate subject matter is the
lot covered under TCT No. T-102563. The price was P500,000.00. It cannot be denied
that the oral contract of sale entered into between Recio and Alejandro was valid, but
only as to Alejandro's aliquot share of the subject property is concerned because he
did not have an SPA to represent his other siblings who did not agree to sell their
property.
2014

Name: WOODCHILD HOLDINGS, INC., petitioner, vs. ROXAS ELECTRIC AND

CONSTRUCTION COMPANY, INC., respondent. August 12, 2014

Facts: Roxas Electric and Construction Company, Inc. was the owner of two parcels
of land, identified as Lot No. 491-A-3-B-1 covered by Transfer Certificate of Title (TCT)
No. 78085 and Lot No. 491-A-3-B-2 covered by TCT No. 78086. the respondent's
Board of Directors approved a resolution authorizing the corporation, through its
president, Roberto B. Roxas, to sell Lot No. 491-A-3-B-2 covered by TCT No. 78086,
with an area of 7,213 square meters, at a price and under such terms and conditions
which he deemed most reasonable and advantageous to the corporation; and to
execute, sign and deliver the pertinent sales documents and receive the proceeds of
the sale for and on behalf of the company. Petitioner Woodchild Holdings, Inc. (WHI)
wanted to buy Lot No. 491-A-3-B-2 covered by TCT No. 78086 on which it planned to
construct its warehouse building, and a portion of the adjoining lot, Lot No. 491-A-3-
B-1, so that its 45-foot container van would be able to readily enter or leave the
property. WHI President Jonathan Y. Dy offered to buy Lot No. 491-A-3-B-2 under
stated terms and conditions for P1,000 per square meter or at the price of P7,213,000.
Roxas indicated his acceptance of the offer. Roxas, as President of RECCI, as vendor,
and Dy, as President of WHI, as vendee, executed a contract to sell in which RECCI
bound and obliged itself to sell to Dy Lot No. 491-A-3-B-2 covered by TCT No. 78086
for P7,213,000.6On September 5, 1991, a Deed of Absolute Sale7in favor of WHI was
issued, under which Lot No. 491-A-3-B-2 covered by TCT No. 78086 was sold for
P5,000,000, receipt of which was acknowledged by Roxas under the following terms
and conditions: The Vendor agree (sic), as it hereby agrees and binds itself to give
Vendee the beneficial use of and a right of way from Sumulong Highway to the
property herein conveyed consists of 25 square meters wide to be used as the latter's
egress from and ingress to and an additional 25 square meters in the corner of Lot No.
491-A-3-B-1, as turning and/or maneuvering area for Vendee's vehicles.The Vendor
agrees that in the event that the right of way is insufficient for the Vendee's use (ex
entry of a 45-foot container) the Vendor agrees to sell additional square meters from
its current adjacent property to allow the Vendee full access and full use of the
property.WHI wrote the RECCI, reiterating its verbal requests to purchase a portion of
the said lot as provided for in the deed of absolute sale, and complained about the
latter's failure to eject the squatters within the three-month period agreed upon in the
said deed. RECCI rejected the demand of WHI. WHI filed a complaint against the
RECCI with the Regional Trial Court of Makati, for specific performance and damages.
RTC ruled in favor of WHI. CA rendered a decision reversing that of the trial court.

Issue: Whether the respondent is bound by the provisions in the deed of absolute sale
granting to the petitioner beneficial use and a right of way over a portion of Lot No.
491-A-3-B-1 accessing to the Sumulong Highway and granting the option to the
petitioner to buy a portion thereof, and, if so, whether such agreement is enforceable
against the respondent?

Decision: No. A corporation is a juridical person separate and distinct from its
stockholders or members. Accordingly, the property of the corporation is not the
property of its stockholders or members and may not be sold by the stockholders or
members without express authorization from the corporation's board of directors.
Indubitably, a corporation may act only through its board of directors or, when
authorized either by its by-laws or by its board resolution, through its officers or agents
in the normal course of business. The general principles of agency govern the relation
between the corporation and its officers or agents, subject to the articles of
incorporation, by-laws, or relevant provisions of law. Evidently, Roxas was not
specifically authorized under the said resolution to grant a right of way in favor of the
petitioner on a portion of Lot No. 491-A-3-B-1 or to agree to sell to the petitioner a
portion thereof. The authority of Roxas, under the resolution, to sell Lot No. 491-A-3-
B-2 covered by TCT No. 78086 did not include the authority to sell a portion of the
adjacent lot, Lot No. 491-A-3-B-1, or to create or convey real rights thereon. Neither
may such authority be implied from the authority granted to Roxas to sell Lot No. 491-
A-3-B-2 to the petitioner "on such terms and conditions which he deems most
reasonable and advantageous." Under paragraph 12, Article 1878 of the New Civil
Code, a special power of attorney is required to convey real rights over immovable
property.26Article 1358 of the New Civil Code requires that contracts which have for
their object the creation of real rights over immovable property must appear in a public
document.27The petitioner cannot feign ignorance of the need for Roxas to have been
specifically authorized in writing by the Board of Directors to be able to validly grant a
right of way and agree to sell a portion of Lot No. 491-A-3-B-1. The rule is that if the
act of the agent is one which requires authority in writing, those dealing with him are
charged with notice of that fact. respondent had not ratified the unauthorized acts of
Roxas, the same are unenforceable.38Hence, by the respondent's retention of the
amount, it cannot thereby be implied that it had ratified the unauthorized acts of its
agent, Roberto Roxas.
Name: Iglesia Filipina Independiente vs. Heirs of Bernardino Taeza, G.R. No. 179597,
February 03, 2014, 715 SCRA 138

Facts: Iglesia Filipina Independiente (IFI), a religious corporation owned a parcel of

land which was transferred by Rev. Macario Ga in his capacity as the Supreme Bishop
of IFI to Bernardino Taeza under a deed of sale with mortgage on February 5, 1976.
The officers of the Laymen’s Committee of the Parish Council filed a complaint for
annulment of said deed of sale but the complaint was dismissed by the trial court. Rev.
Ga’s term as Supreme Bishop of the IFI terminated on May 8, 1981. Meanwhile
Bernardino Taeza registered the subject parcels of land and Transfer Certificate of
Sale was issued to him. On January 1990, a complaint for annulment of sale was again
filed by IFI through the newly-appointed Supreme Bishop. The trial court rendered a
decision in favor of petitioner declaring that the deed of sale was null and void. On
appeal, the appellate court reversed the RTC’s decision ruling that IFI, being a
corporation sole validly transferred ownership over the land through it Supreme Bishop
who was the administrator of all properties and the official representative of the church.

Issue: Is then Supreme Bishop Rev. Ga authorized to enter into a contract disposing
a property in behalf of IFI?

Decision: No. Section 113 (now Section 111) provides that in cases where the rules,
regulations, and discipline of the religious denomination, sect or church, religious
society, or order concerned represented by such corporation sole regulate the method
of acquiring, holding, selling, and mortgaging real estate and personal property, such
rules, regulations and discipline shall govern. Article IV (a) of their Canons provides
that “All real properties of the Church located or situated in such parish can be
disposed of only with the approval and conformity of the laymen’s committee, the
parish priest, the Diocesan Bishop, with sanction of the Supreme Council, and finally
with the approval of the Supreme Bishop, as administrator of all the temporalities of
the Church.” The Laymen’s Committee made its objection to the sale known to the
Supreme Bishop. Since the Canons require that all the church entities listed in Article
IV (a) of the Canons should give its approval to the transaction, in executing the sale,
Supreme Bishop Rev. Ga had acted beyond his powers making the contract of sale
with mortgage unenforceable.
Name: ALVIN PATRIMONIO, Petitioner, vs. NAPOLEON GUTIERREZ and OCTAVIO
MARASIGAN III, Respondents. G.R. No. 187769, SECOND DIVISION, June 4, 2014,

Facts: The petitioner and the respondent Napoleon Gutierrez entered into a business
venture under the name of Slam Dunk Corporation, a production outfit that produced
mini-concerts and shows related to basketball. Petitioner was already then a
decorated professional basketball player while Gutierrez was a well-known sports
columnist. In the course of their business, the petitioner presigned several checks to
answer for the expenses of Slam Dunk. Although signed, these checks had no payee’s
name, date, or amount. The blank checks were entrusted to Gutierrez with the specific
instruction not to fill them out without previous notification to and approval by the
petitioner. According to petitioner, the arrangement was made so that he could verify
the validity of the payment and make the proper arrangements to fund the account.
Without the petitioner’s knowledge and consent, Gutierrez went to Marasigan to
secure a loan in the amount of 200,000 on the excuse that the petitioner needed the
money for the construction of his house. In addition to the payment of the principal,
Gutierrez assured Marasigan that he would be paid an interest of 5% per month.
Marasigan acceded and gave him the money. Gutierrez simultaneously delivered to
Marasigan one of the blank checks the petitioner pre-signed with Pilipinas Bank.
Marasigan deposited the check but it was dishonored for the reasons “account closed.”
Marasigan sough recovery from Gutierrez, to no avail. He thereafter sent several
demand letters to the petitioner asking for the payment of 200,000, but his demands
likewise went unheeded. Consequently, he filed a criminal case for violation of BP 22
against the petitioner. Petitioner then filed before the RTC a complaint for declaration
of nullity of loan and recovery of damages against Gutierrez and Marasigan. He
completely denied authorizing the loan or the check’s negotiation, and asserted that
he was not privy to the parties’ loan agreement. The RTC and the CA ruled in favor of
Marasigan. The petitioner argues that under Art. 1878 of the CC, a special power of
attorney is necessary for an individual to make a loan of borrow money in behalf of
another.

Issue: Whether the contract of loan in the amount of 200,000 granted by respondent
Marasigan to the petitioner through respondent Gutierrez may be nullified for being
void?

Decision: Yes. The petitioner seeks to nullify the contract of loan on the ground that
he never authorized the borrowing of money. He points to Article 1878, paragraph 7
of the Civil Code, which explicitly requires a written authority when the loan is
contracted through an agent. The petitioner contends that absent such authority in
writing, he should not be held liable for the face value of the check because he was
not a party or privy to the agreement. Article 1878 paragraph 7 of the Civil Code
expressly requires a special power of authority before an agent can loan or borrow
money in behalf of the principal, to wit:
Art. 1878. Special powers of attorney are necessary in the following cases:
(7) To loan or borrow money, unless the latter act be urgent and indispensable for the
preservation of the things which are under administration. (emphasis supplied) Article
1878 does not state that the authority be in writing. As long as the mandate is express,
such authority may be either oral or written. We unequivocably declared in one case
that the requirement under Article 1878 of the Civil Code refers to the nature of the
authorization and not to its form. Be that as it may, the authority must be duly
established by competent and convincing evidence other than the self-serving
assertion of the party claiming that such authority was verbally given. And more
recently, we, stated that, if the special authority is not written, then it must be duly
established by evidence. Here, the contract of loan entered into by Gutierrez in behalf
of the Petitioner should be nullified for being void; petitioner is not bound by the
Contract of Loan. A review of the records reveals that Gutierrez did not have any
authority to borrow money in behalf of the petitioner. Records do not show that the
petitioner executed any special power of attorney (SPA) in favor of Gutierrez. In fact,
the petitioner’s testimony confirmed that he never authorized Gutierrez (or anyone for
that matter), whether verbally or in writing, to borrow money in his behalf, nor was he
aware of any such transaction: Marasigan however submits that the petitioner’s acts
of pre-signing the blank checks and releasing them to Gutierrez suffice to establish
that the petitioner had authorized Gutierrez to fill them out and contract the loan in his
behalf. Marasigan’s submission fails to persuade us. In the absence of any
authorization, Gutierrez could not enter into a contract of loan in behalf of the
petitioner. In the absence of any showing of any agency relations or special authority
to act for and in behalf of the petitioner, the loan agreement Gutierrez entered into with
Marasigan is null and void. Thus, the petitioner is not bound by the parties’ loan
agreement. Furthermore, that the petitioner entrusted the blank pre-signed checks to
Gutierrez is not legally sufficient because the authority to enter into a loan can never
be presumed. The contract of agency and the special fiduciary relationship inherent in
this contract must exist as a matter of fact. The person alleging it has the burden of
proof to show, not only the fact of agency, but also its nature and extent. The records
show that Marasigan merely relied on the words of Gutierrez without securing a copy
of the SPA in favor of the latter and without verifying from the petitioner whether he
had authorized the borrowing of money or release of the check. He was thus bound
by the risk accompanying his trust on the mere assurances of Gutierrez.
2015

Name: V-GENT, INC., Petitioner, vs. MORNING STAR TRAVEL and TOURS, INC.,
Respondent. G.R. No. 186305, SECOND DIVISION, July 22, 2015

Facts: The petitioner V-Gent, Inc. (V-Gent) bought twenty-six (26)2 two-way plane
tickets (Manila-Europe-Manila) from the respondent Morning Star Travel and Tours,
Inc. (Morning Star). On June 24, 1998 and September 28, 1998, V-Gent returned a
total of fifteen (15) unused tickets worth $8,747.50 to the defendant. Of the 15, Morning
Star refunded only six (6) tickets worth $3,445.62. Morning Star refused to refund the
remaining nine (9) unused tickets despite repeated demands. On December 15, 2000,
petitioner V-Gent filed a money claim against Morning Star for payment of the
unrefunded $5,301.88 plus attorney's fees. Morning Star countered that V-Gent was
not entitled to a refund because the tickets were bought on the airline company's "buy
one, take one" promo. It alleged that there were only fourteen (14) unused tickets and
only seven (7) of these were refundable; considering that it had already refunded six
(6) tickets (which is more or less 50o/o of 14), then there was nothing else to refund.
Morning Star also questioned V-Gent's personality to file the suit. It asserted that the
passengers, in whose names the tickets were issued, are the real parties-in-interest.

Issue: Whether VGENT, the agent, has legal standing to file the complaint?

Decision: No. Every action must be prosecuted or defended in the name of the real
party-in-interest – the party who stands to be benefited or injured by the judgment in
the suit.8 In suits where an agent represents a party, the principal is the real party-in-
interest; an agent cannot file a suit in his own name on behalf of the principal. Rule 3,
Section 3 of the Rules of Court provides the exception when an agent may sue or be
sued without joining the principal. Section 3. Representatives as parties. - Where the
action is allowed to be prosecuted and defended by a representative or someone
acting in a fiduciary capacity, the beneficiary shall be included in the title of the case
and shall be deemed to be the real party-in-interest. A representative may be a trustee
of an express trust, a guardian, an executor or administrator, or a party authorized by
law or these Rules. An agent acting in his own name and for the benefit of an
undisclosed principal may sue or be sued without joining the principal except when the
contract involves things belonging to the principal. Thus an agent may sue or be sued
solely in its own name and without joining the principal when the following elements
concur: (1) the agent acted in his own name during the transaction; (2) the agent acted
for the benefit of an undisclosed principal; and (3) the transaction did not involve the
property of the principal. When these elements are present, the agent becomes bound
as if the transaction were its own. This rule is consistent with Article 1883 of the Civil
Code which says: Art. 1883. If an agent acts in his own name, the principal has no
right of action against the persons with whom the agent has contracted; neither have
such persons against the principal. In such case, the agent is the one directly bound
in favor of the person with whom he has contracted, as if the transaction were his own,
except when the contract involves things belonging to the principal. The provisions of
this article shall be understood to be without prejudice to the actions between the
principal and agent. In the present case, only the · first element is present; the
purchase order and the receipt were in the name of V-Gent. However, the remaining
elements are absent because: (1) V-Gent disclosed the names of the passengers to
Morning Star - in fact the tickets were in their names; and (2) the transaction was paid
using the passengers' money. Therefore, Rule 3, Section 3 of the Rules of Court
cannot apply. To define the actual factual situation, V-Gent, the agent, is suing to
recover the money of its principals - the passengers - who are the real parties-in-
interest because they stand to be injured or benefited in case Morning Star refuses or
agrees to grant the refund because the money belongs to them. From this perspective,
V-Gent evidently does not have a legal standing to file the complaint. Finally, V-Gent
argues that by making a partial refund, Morning Star was already estopped from
refusing to make a full refund on the ground that V-Gent is not the real party-in-interest
to demand reimbursement. We find no merit in this argument. The power to collect
and receive payments on behalf of the principal is an ordinary act of administration
covered by the general powers of an agent. On the other hand, the filing of suits is an
act of strict dominion.
Name: SPOUSES ROLANDO AND HERMINIA SALVADOR, Petitioners, v.
SPOUSES ROGELIO AND ELIZABETH RABAJA AND ROSARIO GONZALES,
Respondents. G.R. No. 199990, SECOND DIVISION, February 04, 2015

Facts: Sometime in July 1998, Spouses Rabaja learned that Spouses Salvador were
looking for a buyer of the subject property. Petitioner Herminia Salvador (Herminia)
personally introduced Gonzales to them as the administrator of the said property.
Spouses Salvador even handed to Gonzales the owner’s duplicate certificate of title
over the subject property. On July, 3, 1998, Spouses Rabaja made an initial payment
of P48,000.00 to Gonzales in the presence of Herminia. Gonzales then presented the
Special Power of Attorney3 (SPA), executed by Rolando Salvador (Rolando) and
dated July 24, 1998. On the same day, the parties executed the Contract to Sell4
which stipulated that for a consideration of P5,000,000.00, Spouses Salvador sold,
transferred and conveyed in favor of Spouses Rabaja the subject property. Spouses
Rabaja made several payments totaling P950,000.00, which were received by
Gonzales pursuant to the SPA provided earlier as evidenced by the check vouchers
signed by Gonzales and the improvised receipts signed by Herminia. Sometime in
June 1999, however, Spouses Salvador complained to Spouses Rabaja that they did
not receive any payment from Gonzales. This prompted Spouses Rabaja to suspend
further payment of the purchase price; and as a consequence, they received a notice
to vacate the subject property from Spouses Salvador for non-payment of rentals.
Thereafter, Spouses Salvador instituted an action for ejectment against Spouses
Rabaja. In turn, Spouses Rabaja filed an action for rescission of contract against
Spouses Salvador and Gonzales, the subject matter of the present petition.

Issue: Whether Gonzales, as agent of Spouses Salvador, could validly receive the
payments of Spouses Rabaja?

Decision: Yes. The Court agrees with the courts below in finding that the contract
entered into by the parties was essentially a contract of sale which could be validly
rescinded. Spouses Salvador insist that they did not receive the payments made by
Spouses Rabaja from Gonzales which totaled P950,000.00 and that Gonzales was
not their duly authorized agent. These contentions, however, must fail in light of the
applicable provisions of the New Civil Code which state:
Art. 1900. So far as third persons are concerned, an act is deemed to have been
performed within the scope of the agent's authority, if such act is within the terms of
the power of attorney, as written, even if the agent has in fact exceeded the limits of
his authority according to an understanding between the principal and the agent. Art.
1902. A third person with whom the agent wishes to contract on behalf of the principal
may require the presentation of the power of attorney, or the instructions as regards
the agency. Private or secret orders and instructions of the principal do not prejudice
third persons who have relied upon the power of attorney or instructions shown them.
Art. 1910. The principal must comply with all the obligations which the agent may have
contracted within the scope of his authority. Persons dealing with an agent must
ascertain not only the fact of agency, but also the nature and extent of the agent’s
authority. A third person with whom the agent wishes to contract on behalf of the
principal may require the presentation of the power of attorney, or the instructions as
regards the agency. The basis for agency is representation and a person dealing with
an agent is put upon inquiry and must discover on his own peril the authority of the
agent. In this case, Spouses Rabaja did not recklessly enter into a contract to sell with
Gonzales. They required her presentation of the power of attorney before they
transacted with her principal. And when Gonzales presented the SPA to Spouses
Rabaja, the latter had no reason not to rely on it. Perhaps the most significant point
which defeats the petition would be the fact that it was Herminia herself who personally
introduced Gonzalez to Spouses Rabaja as the administrator of the subject property.
By their own ostensible acts, Spouses Salvador made third persons believe that
Gonzales was duly authorized to administer, negotiate and sell the subject property.
This fact was even affirmed by Spouses Salvador themselves in their petition where
they stated that they had authorized Gonzales to look for a buyer of their property.40
It is already too late in the day for Spouses Salvador to retract the representation to
unjustifiably escape their principal obligation. As correctly held by the CA and the RTC,
considering that there was a valid SPA, then Spouses Rabaja properly made
payments to Gonzales, as agent of Spouses Salvador; and it was as if they paid to
Spouses Salvador. It is of no moment, insofar as Spouses Rabaja are concerned,
whether or not the payments were actually remitted to Spouses Salvador. Any internal
matter, arrangement, grievance or strife between the principal and the agent is theirs
alone and should not affect third persons. If Spouses Salvador did not receive the
payments or they wish to specifically revoke the SPA, then their recourse is to institute
a separate action against Gonzales. Such action, however, is not any more covered
by the present proceeding.
Name: Security and Exchange Commission vs. Hon. Laygo et al. G.R. No. 188639,
September 02, 2015

Facts: Pursuant to the mandate of Securities Regulation Code, the SEC issued the
New Rules on the Registration and Sale of Pre-Need Plans to govern the pre-need
industry prior to the enactment of the Pre-Need Code. It required from the pre-need
providers the creation of trust funds as a requirement for registration. Legacy, being a
pre-need provider, complied with the trust fund requirement and entered into a trust
agreement with Land Bank. In mid-2000, the industry collapsed for a range of reasons.
Legacy, like the others, was unable to pay its obligations to the plan holders. This
resulted in Legacy being the subject of a petition for involuntary insolvency by private
respondents in their capacity as plan holders. Through its manifestation filed in the
RTC, Legacy did not object to the proceedings and was declared insolvent by the RTC.
The trial court also ordered Legacy to submit an inventory of its assets and liabilities.
The RTC ordered the SEC, to submit the documents pertaining to Legacy's assets
and liabilities. The SEC opposed the inclusion of the trust fund in the inventory of
corporate assets on the ground that to do so would contravene the New Rules which
treated trust funds as principally established for the exclusive purpose of guaranteeing
the delivery of benefits due to the plan holders. Despite the opposition of the SEC,
Judge Laigo ordered the insolvency Assignee to take possession of the trust fund.
Judge Laigo viewed the trust fund as Legacy's corporate assets and, for said reason,
included it in the insolvent's estate. The Assignee argues that Legacy has retained a
beneficial interest in the trust fund despite the execution of the trust agreement and
that the properties can be the subject of insolvency proceedings. To the Assignee, the
―control mechanisms in the Trust Agreement itself are indicative of the interest of
Legacy in the enforcement of the trust fund because the agreement gives it the power
to dictate on LBP (trustee) the fulfilment of the trust, such as the delivery of monies to
it to facilitate the payment to the plan holders.

Issues:1) Whether Legacy is a beneficiary in the Trust Fund Agreement?

2) Whether Legacy is a debtor of the plan holders with respect to the trust fund?

Decision: The SC ruled that Legacy is not a beneficiary. A person is considered as a

beneficiary of a trust if there is a manifest intention to give such a person the beneficial
interest over the trust properties. Here, the terms of the trust agreement plainly confer
the status of beneficiary to the plan holders, not to Legacy. In the recital clauses of the
said agreement, Legacy bound itself to provide for the sound, prudent and efficient
management and administration of such portion of the collection "for the benefit and
account of the plan holders," through LBP as the trustee. This categorical declaration
doubtless indicates that the intention of the trustor (Legacy) is to make the plan holders
the beneficiaries of the trust properties, and not Legacy. It is clear that because the
beneficial ownership is vested in the plan holders and the legal ownership in the
trustee, LBP, Legacy, as trustor, is left without any iota of interest in the trust fund.
This is consistent with the nature of a trust arrangement, whereby there is a separation
of interests in the subject matter of the trust, the beneficiary having an equitable
interest, and the trustee having an interest which is normally legal interest. No. Legacy
is not a debtor of the plan holders relative to the trust fund. In trust, it is the trustee,
and not the trustor, who owes fiduciary duty to the beneficiary. Thus, LBP is tasked
with the fiduciary duty to act for the benefit of the plan holders as to matters within the
scope of the relation. Like a debtor, LBP owes the plan holders the amounts due from
the trust fund. As to the plan holders, as creditors, they can rightfully use equitable
remedies against the trustee for the protection of their interest in the trust fund and, in
particular, their right to demand the payment of what is due them from the fund. Verily,
Legacy is out of the picture and exists only as a representative of the trustee, LBP,
with the limited role of facilitating the delivery of the benefits of the trust fund to the
beneficiaries -the plan holders. The trust fund should not revert to Legacy, which has
no beneficial interest over it. Not being an asset of Legacy, the trust fund is immune
from its reach and cannot be included by the RTC in the insolvency estate.
2016

Name: MICHAEL C. GUY, Petitioner, vs. ATTY. GLENN C. GACOTT, Respondent.

G.R. No. 206147, January 13, 2016

Facts: Atty. Gacott from Palawan purchased two (2) brand new transreceivers from
Quantech Systems Corporation (QSC) in Manila through its employee Rey
Medestomas. After some time, he returned it due to major defects. But time passed,
he was not able to get the replacement units and he was informed that there were no
available units and he cannot refund the purchase price. He filed a complaint for
damages. But during execution, he learned that QSC was not a corporation but, a
general partnership with Mr. Guy as a partner and its general manager. Because of
that, Gacott instructed the sheriff to proceed with the attachment of one of the motor
vehicles of Guy. After that, Guy filed a Motion to lift Attachment Upon Personality
arguing that he was not a judgment debtor and, therefore, his vehicle could not be
attached but it has been denied by the RTC and CA stating that he is solidarily liable
to the liability of the partnership since he is the general manager.

Issue: Whether or not Guy is solidarily liable with the partnership for damages arising
from the breach of contract of sale with Gacott?

Decision: The Supreme Court stated that a partner must be separately and distinctly
impleaded before he can be bound by a judgment. It is not conclusive that a suit
against a partnership will also be a suit impleading each partner unless it was shown
that the legal fiction of a different juridical personality was being used for fraudulent,
unfair, or illegal purposes. Since a partnership has a separate legal personality from
the partners, the partners' obligation with respect to partnership liabilities is joint and
subsidiary in nature which means all partners shall be liable pro rata with all their
property and partners shall only be liable with their property after the partnership
assets have been exhausted. Therefore, since Guy did not act maliciously, he and his
personal properties cannot be made directly and solely accountable for the liability of
QSC and that he was not the judgment debtor in the case before the RTC, with that,
his levied vehicle was released.
2017

Name: SPOUSES MAY S. VILLALUZ and JOHNNY VILLALUZ, JR., vs. LAND BANK
OF THE PHILIPPINES and the REGISTER OF DEEDS FOR DAVAO CITY G.R. No.
192602, January 18, 2017

Facts: In 1996, the Spouses May and Johnny Villauz (“Spouses”) executed an SPA
in favor of May Villauz’s mother. Paula Agbisit, which authorized the latter to “sign in
our behalf all documents relating the sale, mortgage, or other disposition’ of a property
owned by the Spouses located in Davao City. The property was to be used as
collateral for a loan to expand Paula Agbisit’s backyard cut flower business. On June
19, 1996, Paula Agbisit executed her own SPA appointing (as her substitute agent)
Milflores Cooperative (of which she was the Chairperson) as attorney-in-fact in
obtaining a loan from and executing a real estate mortgage in favor of the Land Bank
of the Philippines. Milflores Cooperative also executed a Deed of Assignment of
Produce/ Inventory as additional collateral for the loan. Land Bank of the Philippines
approved a P3 million loan in favor of Milflores Cooperative and on June 25, 1996
made a partial release of P995, 500. On the same day, Paula Agbisit borrowed the
amount of P604, 750 from Milflores Cooperative. The trial court dismissed the
complaint and which dismissal was affirmed by the Court of Appeals. Hence, this
petition to the Supreme Court.

Issues:1. Whether Paula Agbisit could further delegate her authority as attorney-in-
fact for the Spouses Villaluz? If not, was the mortgage in favor of Land Bank executed
by Milflores Cooperative void?
2. Whether the real estate mortgage can be deemed void since there was no
loan yet when the mortgage was executed.
3. Whether the SPA issued by the Spouses in favor of Paula Agbisit was
extinguished when Milflores Cooperative assigned its produce and inventory to Land
Bank as additional collateral.

Decision: 1. YES. The delegation of authority made by Paula Agbisit to Milflores

Cooperative is valid. Articles 1892 and 1893 of the Civil Code provide the rules
regarding the appointment of a substitute by an agent. The law created a presumption
that an agent has the power to appoint a substitute. The consequence of the
presumption is that, upon valid appointment of a substitute by the agent, there ipso
facto arises an agency relationship between the principal and the substitute, i.e. the
substitute becomes the agent of the principal. As a result, the principal is bound by the
acts of the substitute as if these acts had been done by the principal’s appointed agent.
In this case, the SPA executed by the Spouses in favor of Paula Agbisit contains no
restrictive language indicative of an intention to prohibit Paula Agbisit from appointing
a substitute agent. Thus, Paula Agbisit’s appointment of Milflores as substitute agent
was valid and consequently, the real estate mortgage is considered validly executed.
2. The Spouses floated a new theory that the mortgage was void because the
loan was not yet in existence when the mortgage was executed on June 21, 1996 as
the loan was released only on June 25, 1996. The Supreme Court ruled that although
the validity of the real estate mortgage is dependent upon the validity of the loan, what
is essential is that the loan contract intended to be secured is actually perfected
(although the proceeds are not yet released) prior to the execution of the mortgage
contract. In loan transactions, it is customary for the lender to require the borrower to
execute the security contracts prior to the initial loan drawdown. This is
understandable since a prudent bank would not want to release its funds without the
security arrangements in place. On the other hand, the borrower would not be
prejudiced by mere execution of the security contract because unless the proceeds
are delivered, the obligations under the security contracts will not arise. In other words,
the security contract, in this case, the real estate mortgage, is conditioned upon the
release of the loan amount. This suspensive condition was satisfied when Land Bank
released the first tranche of the ₱3,000,000 loan to Milflores Cooperative, which
consequently gave rise to the Spouses’ obligations under the real estate mortgage.
The Spouses’ theory that the additional security by Milflores Cooperative of its
produce/ inventory extinguished the loan and consequently the agency contract, was
likewise found to be unacceptable. The assignment was for the express purpose of
“securing the payment of the line/ loan, interest, and charges thereon.” Nowhere in the
deed can it be reasonably deduced that the collaterals assigned by Milflores
Cooperative were intended to substitute the payment of the sum of money under the
loan. It was merely an accessory contract to secure the principal loan obligation. The
Spouses understandably feel shorthanded because their property was foreclosed by
reason of another person’s inability to pay. However, they were not coerced to grant
an SPA in favor of Paula Agbisit. Nor were they prohibited from prescribing conditions
on how such power may be exercised. Absent such express limitations, the law
recognized Land Bank’s right to rely on the terms of the power of attorney as written.
Name: INTERNATIONAL EXCHANGE BANK NOW UNION BANK OF THE
PHILIPPINES vs SPOUSES JEROME AND QUINNIE BRIONES, AND JOHN DOE
G.R. No. 205657, March 29, 2017

Facts: Spouses Briones took out a loan of P3.7M from iBank (now Union Bank) to
purchase a BMW Z4 Roadster. They executed a promissory note that required them
to take out an insurance policy on the car and to give iBank, as attomey-infact,
irrevocable authority to file an insurance claim in case of loss or damage to the vehicle.
The BMW was carnapped so the spouses declared the loss to iBank, which instructed
them to continue paying the next three monthly installments "as a sign of good faith,”
a directive they complied with. After they finished paying the 3 installments, iBank
demanded full payment of the lost vehicle. The spouses submitted a notice of claim
with their insurance company which was denied due to a delay in the reporting of the
lost vehicle. iBank filed a complaint for replevin or sum of money against the spouses
alleging default in paying the monthly amortizations of the mortgaged vehicle.

Issue: Whether or not Spouses Briones are liable to iBank for the monthly
amortizations of the BMW?

Decision: No. Under the promissory note, Spouses Briones appointed iBank as their
attorney-in-fact (agent), authorizing it to file a claim with the insurance company if the
mortgaged vehicle was lost or damaged. iBank was also authorized to collect the
insurance proceeds as the beneficiary of the insurance policy. As the agent, petitioner
was mandated to look after the interests of the Spouses Briones by collecting the
insurance proceeds. However, instead of going after the insurance proceeds, as
expected of it as the agent, petitioner opted to claim the full amount from the Spouses
Briones, disregarding the established principal-agency relationship, and putting its
own interests before those of its principal. The insurance policy was valid when the
vehicle was lost, and that the insurance claim was only denied because of the belated
filing. Having been negligent in its duties as the duly constituted agent, petitioner must
be held liable for the denial of the insurance claim suffered by the Spouses Briones
because of non-performance of its obligation as the agent, and because it prioritized
its interests over that of its principal. Petitioner's bad faith was evident when it advised
the Spouses Briones to continue paying three (3) monthly installments after the loss,
purportedly to show their good faith. If petitioner was indeed acting in good faith, it
could have timely informed the Spouses Briones that it was terminating the agency
and its right to file an insurance claim, and could have advised them to facilitate the
insurance proceeds themselves. This would have allowed the spouses to collect from
their insurer and pay the amortizations on the BMW.
2018

Name: ASIA PACIFIC RESOURCES INTERNATIONAL HOLDINGS, LTD., Petitioner,

vs. PAPERONE, INC., Respondent. G.R. Nos. 213365-66, December 10, 2018

Facts: Petitioner is engaged in the production, marketing, and sale of pulp and
premium wood free paper. It alleged that it is the owner of a well-known trademark,
PAPER ONE, issued on September 5, 2003.The said trademark enjoyed legal
protection in different countries worldwide and enjoyed goodwill and high reputation
because of aggressive marketing and promotion. Petitioner claimed that the use of
PAPERONE in respondent's corporate name without its prior consent and authority
was done in bad faith and designed to unfairly ride on its good name and to take
advantage of its goodwill. It was calculated to mislead the public into believing that
respondent's business and/or products were manufactured, licensed or sponsored by
petitioner. Respondent, on its part, averred that it had no obligation to secure prior
consent or authority from petitioner to adopt and use its corporate name. The DTI and
the SEC had allowed it to use Paperone, Inc., thereby negating any violation on
petitioner's alleged prior rights. Respondent was registered with the SEC, having been
organized and existing since March 30, 2001.While the business of respondent dealt
with paper conversion such as manufacture of table napkins, notebooks and
intermediate/collegiate writing pads, it did not use its corporate name PAPERONE on
any of its products. The Bureau of Legal Affairs Director, Intellectual Property Office,
found respondent liable for unfair competition.CA reversed the decision ruling that
there was no confusing similarity in the general appearance of the goods of both
parties.

Issue: Whether or not Respondent was liable for unfair competition?

Decision: Yes, respondent was liable for unfair competition. The essential elements
of an action for unfair competition are: (1) confusing similarity in the general
appearance of the goods, and (2) intent to deceive the public and defraud a
competitor.1.) Confusing similarity: It can easily be observed that both have the same
spelling and are pronounced the same. Initially, respondent's trade name had separate
words that read "Paper One, Inc." under its original Articles of Incorporation. This was
later on revised to make it one word, and now reads "Paperone, Inc." Relative to the
issue on confusion of marks and trade names, jurisprudence has noted two types of
confusion(1) confusion of goods (product confusion), where the ordinarily prudent
purchaser would be induced to purchase one product in the belief that he was
purchasing the other; and (2) confusion of business where, although the goods of the
parties are different, the product, the mark of which registration is applied for by one
party, is such as might reasonably be assumed to originate with the registrant of an
earlier product; and the public would then be deceived either into that belief or into the
belief that there is some connection between the two parties, though inexistent. This
case falls under the second type of confusion. One essential factor that has led this
Office to tilt the scales of justice in favor of Complainant is the latter's establishment of
prior use of the word PaperOne for paper products in the Philippines. Records will
show that there was prior use and adoption by Complainant of the word "PaperOne."
PaperOne was filed for trademark registration on 22 March 1999 in the name of
Complainant Asia Pacific Resources International Holdings, Ltd. and matured into
registration on 10 February 2003. If anyone files a suit and can prove priority of
adoption, he can assert his right to the exclusive use of a corporate name with freedom
from infringement by similarity. Respondent was incorporated in March 2001 and was
registered two (2) years thereafter as business name with the DTI. Complainant APRIL
presented evidence of its use of the label PaperOne on paper products in the
Philippines earlier than the date of its trademark application in 1999 when its marketing
and promotion agent JND International Corporation licensed one of its clients,
presented evidence of its use of the label PaperOne on paper products in
thePhilippines earlier than the date of its trademark application in 1999 when its
marketing and promotion agent JND International Corporation.
Name: ANICETO G. SALUDO v. PHILIPPINE NATIONAL BANK, GR No. 193138,
2018-08-20

Facts: CA affirmed with modification the January 11, 2007 Omnibus Order issued by
Branch 58 of the Regional Trial Court (RTC) of Makati City... ruled that respondent
Philippine National Bank's (PNB) counterclaims against Saludo and the Saludo
Agpalo Fernandez and Aquino Law Office (SAFA Law Office) should be reinstated in
its answer. SAFA Law Office entered into a Contract of Lease with PNB, whereby the
latter agreed to lease 632 square meters of the second floor of the PNB Financial
Center Building in Quezon City for a period of three years and for a monthly rental fee
of P189,600.00. Rental fee is subject to a yearly escalation rate of 10%. Occupied the
leased premises and paid advance rental fees and security deposit in the total amount
of P1,137,600.00. According to PNB, SAFA Law Office continued to occupy the leased
premises until February 2005, but discontinued paying its monthly rental obligations
after December 2002. PNB sent a demand letter... to pay its outstanding unpaid rents
in the amount of P4,648,086.34. PNB sent another letter demanding the payment of
unpaid rents in the amount of P5,856,803.53 which was received by SAFA Law Office
on November 10, 2003. SAFA Law Office expressed its intention to negotiate. It
claimed that it was enticed by the former management of PNB into renting the leased
premises by promising to: (1) give it a special rate due to the large area of the place;
(2) endorse PNB's cases to the firm with rents to be paid out of attorney's fees; and
(3) retain the firm as one of PNB's external counsels. When new management took
over, it allegedly agreed to uphold this agreement to facilitate rental payments.
However, not a single case of significance was referred to the firm. SAFA Law Office
then asked PNB to review and discuss its billings, evaluate the improvements in the
area and agree on a compensatory sum to be applied to the unpaid rents, make good
its commitment to endorse or refer cases to SAFA Law Office under the intended terms
and conditions, and book the rental payments due as receivables payable every time
attorney's fees are due from the bank on the cases it referred. 10% discount on its
unpaid rents, noting that while it was waiting for case referrals, it had paid a total
amount of P13,457,622.56 from January 1999 to December 2002, which included the
accelerated rates of 10% per annum beginning August 1999 until July 2003. February
2005, SAFA Law Office vacated the leased premises. proposing a settlement by
providing a range of suggested computations... with deductions for the value of
improvements it introduced in the premises, professional fees due from Macroasia
Corporation, and the 50% discount allegedly promised by Dr. Lucio Tan. PNB,
however, declined the settlement proposal in a letter Saludo, in his capacity as
managing partner of SAFA Law Office, filed an amended complaint for accounting
and/or recomputation of unpaid rentals and damages against PNB. PNB filed a motion
to include an indispensable party as plaintiff, praying that Saludo be ordered to amend
anew his complaint to include SAFA Law Office as principal plaintiff. PNB argued that
the lessee in the Contract of Lease is not Saludo but SAFA Law Office, and that Saludo
merely signed the Contract of Lease as the managing partner of the law firm. Thus,
SAFA Law Office must be joined as a plaintiff in the complaint PNB argued that as a
matter of right and equity, it can claim that amount from SAFA Law Office in solidum
with Saludo. Saludo filed his motion to dismiss counterclaims, mainly arguing that
SAFA Law Office is neither a legal entity nor party litigant. As it is only a relationship
or association of lawyers in the practice of law and a single proprietorship which may
only be sued through its owner or proprietor, no valid counterclaims may be asserted
against it. Court DENIES the motion of PNB to include the SAFA Law Offices. Plaintiff
has shown by documents attached to his pleadings that indeed SAFA Law Offices is
a mere single proprietorship and not a commercial and business partnership. More
importantly, plaintiff has admitted and shown sole responsibility in the affairs entered
into by the SAFA Law Office. PNB has even admitted that the SAFA Law Office, being
a partnership in the practice of law, is a non-legal entity. Being a non-legal entity, it
cannot be a proper party, and therefore, it cannot sue or be sued. CA held that Saludo
is estopped from claiming that SAFA Law Office is his single proprietorship. Under the
doctrine of estoppel, an admission or representation is rendered conclusive upon the
person making it, and cannot be denied or disproved as against the person relying
thereon. Here, SAFA Law Office was the one that entered into the lease contract and
not Saludo. In fact, the latter signed the contract as the firm's managing partner. The
alleged Memorandum of Understanding (MOU) executed by the partners of SAFA Law
Office, which states, among others, that Saludo alone would be liable for the firm's
losses and liabilities, and the letter of Saludo to PNB confirming that SAFA Law Office
is his single proprietorship did not convert the firm to a single proprietorship. Moreover,
SAFA Law Office sent a letter to PNB regarding its unpaid rentals which Saludo signed
as a managing partner. The firm is also registered as a partnership with the Securities
and Exchange Commission. On the question of whether SAFA Law Office is an
indispensable party, the CA held that it is not. As a partnership, it may sue or be sued
in its name or by its duly authorized representative. Saludo, as managing partner, may
execute all acts of administration, including the right to sue. Furthermore, the CA found
that SAFA Law Office is not a legal entity. A partnership for the practice of law is not
a legal entity but a mere relationship or association for a particular purpose. Thus,
SAFA Law Office cannot file an action in court. The CA ruled that PNB's counterclaims
against SAFA Law Office should not be dismissed. While SAFA Law Office is not a
legal entity, it can still be sued under Section 15, Rule 3 of the Rules of Court
considering that it entered into the Contract of Lease with PNB. CA further ruled that
while it is true that SAFA Law Office's liability is not in solidum with Saludo as PNB
asserts, it does not necessarily follow that both of them cannot be made parties to
PNB's counterclaims. The presence of SAFA Law Office is required for the granting of
complete relief in the determination of PNB's counterclaim. The court must, therefore,
order it to be brought in as defendant since jurisdiction over it can be obtained Saludo
raises the following issues.

Issues: Whether or not CA erred in including SAFA Law Office as defendant to PNB's
counterclaim despite its holding that SAFA Law Office is neither an indispensable party
nor a legal entity?

Decision: Petition is bereft of merit. SAFA Law Office is a juridical entity and the real
party--in-interest in the suit filed with the RTC by Saludo against PNB. Hence, it should
be joined as plaintiff in that case. SAFA Law Office is a partnership and not a single
proprietorship. Two or more persons may also form a partnership for the exercise of a
profession. Under Article 1771, a partnership may be constituted in any form, except
where immovable property or real rights are contributed thereto, in which case a public
instrument shall be necessary. Article 1784, on the other hand, provides that a
partnership begins from the moment of the execution of the contract, unless it is
otherwise stipulated. SAFA Law Office was constituted as a partnership at the time its
partners signed the Articles of Partnership wherein they bound themselves to establish
a partnership for the practice of law, contribute capital and industry for the purpose,
and receive compensation and benefits in the course of its operation. Subsequent
registration of the Articles of Partnership with the SEC, on the other hand, was made
in compliance with Article 1772 of the Civil Code, since the initial capital of the
partnership was P500,000.00. Saludo asserts that SAFA Law Office is a sole
proprietorship on the basis of the MOU executed by the partners of the firm. The
foregoing evinces the parties' intention to entirely shift any liability that may be incurred
by SAFA Law Office in the course of its operation to Saludo, who shall also receive all
the remaining assets of the firm upon its dissolution. This MOU, however, does not
serve to convert SAFA Law Office into a sole proprietorship. As discussed, SAFA Law
Office was manifestly established as a partnership based on the Articles of
Partnership. The MOU, from its tenor, reinforces this fact. It did not change the nature
of the organization of SAFA Law Office but only excused the industrial partners from
liability. The MOU is an agreement forged under the foregoing provision.
Consequently, the sole liability being undertaken by Saludo serves to bind only the
parties to the MOU, but never third persons like PNB. Having settled that SAFA Law
Office is a partnership, we hold that it acquired juridical personality by operation of law.
The perfection and validity of a contract of partnership brings about the creation of a
juridical person separate and distinct from the individuals comprising the partnership.
Subsequent communications between the parties have always been made for or on
behalf ofPNB and SAFA Law Office, respectively. Saludo's claims that SAFA Law
Office is his sole proprietorship and not a legal entity fail in light of the clear provisions
of the law on partnership. To reiterate, SAFA Law Office was created as a partnership,
and as such, acquired juridical personality by operation of law. Hence, its rights and
obligations, as well as those of its partners, are determined by law and not by what the
partners purport them to be. We hold, however, that our reference to this US case is
an obiter dictum which cannot serve as a binding precedent. Our law on partnership
does not exclude partnerships for the practice of law from its coverage. Article 1767
of the Civil Code provides that "[t]wo or more persons may also form a partnership for
the exercise of a profession." Article 1783, on the other hand, states that "[a] particular
partnership has for its object determinate things, their use or fruits, or a specific
undertaking, or the exercise of a profession or vocation." Since the law uses the word
"profession" in the general sense, and does not distinguish which professional
partnerships are covered by its provisions and which are not, then no valid distinction
may be made. We stress that unlike Philippine law, American law does not treat of
partnerships as forming a separate juridical personality for all purposes. Our
jurisprudence has long recognized that American common law does not treat of
partnerships as a separate juridical entity unlike Philippine law. It being a basic tenet
of the Spanish and Philippine law that the partnership has a juridical personality of its
own, distinct and separate from that of its partners (unlike American and English law
that does not recognize such separate juridical personality), the bypassing of the
existence of the limited partnership as a taxpayer can only be done by ignoring or
disregarding clear statutory mandates and basic principles of our law. Having settled
that SAFA Law Office is a juridical person, we hold that it is also the real party-in-
interest in the case filed by Saludo against PNB. Under Article 1816 of the Civil Code,
the partners' obligation with respect to the partnership liabilities is subsidiary in nature.
It is merely secondary and only arises if the one primarily liable fails to sufficiently
satisfy the obligation. Resort to the properties of a partner may be made only after
efforts in exhausting partnership assets have failed or if such partnership assets are
insufficient to cover the entire obligation. Consequently, considering that SAFA Law
Office is primarily liable under the contract of lease, it is the real party-in-interest that
should be joined as plaintiff in the RTC case. No showing that SAFA Law Office, as a
separate juridical entity, is being used for fraudulent, unfair, or illegal purposes. Hence,
its partners cannot be held primarily liable for the obligations of the partnership. As it
was SAFA Law Office that entered into a contract of lease with respondent PNB, it
should also be impleaded in any litigation concerning that contract. Petition is DENIED.
2019

Name: Reyes v. Reyes, November 13, 2019, G.R. No. 248414

Facts: In 1992, petitioner Francisco, after working in one of Manila’s well-known

restaurants, Aristocrat Restaurant, thought of putting up his own restaurant and
franchising business. In 2002, he established Reyes Barbecue when he registered it
as a sole proprietorship with the Department of Trade and Industry. In 2005, he filed
an application for registration of the trademark “Reyes Barbecue” written in stylized
form with the Intellectual Property Office (IPO). In 2005, he purportedly offered his
brothers to form a partnership for the franchising arm of Reyes Barbecue as he needed
capital for business expansion. Adolfo and Carlos each contributed P100k in exchange
for a 24% and 15% share, while Ramon contributed a desktop computer valued at
P39k for a 25%. For Francisco, it was agreed that his contribution will be the Reyes
Barbecue trademark registered in his name. However, Francisco denied having
proposed a business partnership with his brothers and insisted that he and his wife
Carolina Inez Angela Reyes, his co-petitioner, conceptualized the business on their
own; and that the intent, from the start, was to form a franchising corporation with his
brothers and not a partnership. Francisco further alleged that the contributions of his
brothers were really subscription payments to the franchising corporation. Francisco
further claimed that he abandoned the plan to form a franchising corporation when he
discovered that the Reyes Barbecue trademark had been fraudulently transferred to
an employee of his nephew Atty. Adolfo Reyes II. In 2008, petitioner’s siblings, through
counsel, sent a demand letter calling for an accounting of the business to determine
any share in the profits that may be due them. They filed a Complaint for damages
with Prayer for Temporary Restraining Order and/or Writ of Preliminary Injunction. On
November 9, 2015, the QC RTC, Branch 216 dismissed the Complaint, agreeing with
petitioners that no partnership was formed due to the absence of any written document
to prove such. It also held that the participation of respondents in the operation of the
business was very limited as they did not participate in the actual management of the
business. It added that it took respondents more than two years from the time that the
partnership was allegedly formed to demand for an accounting of the finances of the
supposed partnership. On appeal, the Court of Appeals (CA) granted the same by
reversing the dismissal of the complaint, reinstating the civil case and remanding the
case to QC RTC, tasked to schedule an accounting of the profits of the Reyes
Barbecue. The CA held that even if no partnership agreement was formalized, nor any
corporation registered, once Frank received the material contributions of his siblings
and allowed them to actively participate in the business, a contract for a joint venture
was perfected and actually executed.

Issue: Whether or not there was a partnership, joint venture or any other commercial
agreement entered into by Frank and his siblings for the expansion of Reyes Barbeque
Business?

Decision: The SC ruled otherwise. It held that the parties, although the structure of
the business was not formalized and registered, entered into a partnership. It noted
that each of the Reyeses contributed money, property, and/or industry to a common
fund with the intention of dividing the profits among themselves. It added that though
there is no written agreement between the parties, the conduct of the parties supports
the conclusion that a partnership was formed. The moment the contributions of Adolfo,
Ramon, and Carlos were received by Frank and the fact that each carried out their
respective tasks in the management of the business leads Us to believe that a
partnership was indeed created. “Although the registration of the franchising arm of
Reyes Barbecue did not materialize, numerous franchises were opened through the
contributions of all the Reyes brothers. Thus, a partnership for the franchising business
of Reyes Barbecue was created,” the Court held.